by Lidia Rodriguez-Hupp, Chief Customer Officer
Rebates are once again in the picture for 340B after HRSA fast-tracked its reintroduction of a pilot program for 2027, representing an upheaval in how 340B operates.
HRSA’s pilot program will expose covered entities to new risks for cash flow, compliance and patient care, and it will subject them to new administrative complexity and time demands as staff scramble to retrieve the required claims data under a compressed deadline.
Earlier this year, in response to HRSA’s request for information on its then-proposed pilot, The Craneware Group ran an analysis of 2025 purchasing activity that would be affected by the new 340B rebate program. Our model found that based on approximately 17 million 340B dispenses of affected drugs, the 169 covered entities included would see added financial exposure of more than $700 million as a result of transitioning to WAC pricing under the rebate pilot.
This summer, we once again submitted comments as part of HRSA’s information collection request for its estimate that complying with 340B rebates would require an average of just five hours per week of additional administrative work.
We were careful to limit our comments only to our area of expertise — we’re a software vendor, not a covered entity, so we are not in position to make specific estimations about time burdens. But we argued that HRSA’s estimate “significantly understates the operational effort required to produce accurate, compliant, and recurring claims-level reporting.”
Technical and operational hurdles
Covered entities, we explained, would face significant technical and operational hurdles in accommodating manufacturers’ demands for claims data to effectuate rebates:
- Hospital-administered drugs undergo a lengthy process, from documentation, charge capture and coding to billing, payer adjudication, corrections (if needed) and financial reconciliation, before a claim can be considered complete. HRSA’s 340B rebate pilot assumes a complete and accurate claims record is available much earlier than it is in reality.
- Further, the requested claims data must be compiled from multiple operational systems, including EHR, charge capture solutions, 340B split-billing applications, wholesaler records, revenue cycle software and manufacturer reporting platforms. “The operational challenge is not simply collecting data—it is determining when a claims record has matured sufficiently to support accurate rebate determination,” we wrote.
- Lastly, we pointed out that no one has clearly articulated the need for the additional claims-level reporting required under the rebate pilot. Manufacturers already mandate claims-data reporting through platforms such as 340B ESP and Beacon, which they say are meant to prevent duplicate discounts. The rebate pilot simply adds a new, more involved reporting workflow with minimal incremental benefit apart from holding payment contingent on meeting more administrative requirements. Why?
“The Craneware Group respectfully urges HRSA to reconsider the proposed burden estimate, fully evaluate the operational realities of hospital claims processing, and ensure that any future reporting framework is supported by a clearly demonstrated need, avoids duplicative reporting requirements, and appropriately balances program integrity with the operational realities facing covered entities,” we wrote.
HRSA’s haste
Unfortunately, I wouldn’t hold my breath.
After its initial attempt to institute a 340B rebate pilot starting Jan. 1, 2026 was blocked in court, the agency has moved quickly to revive its efforts and avoid the mistakes that doomed its first effort.
HRSA received 5,589 comments from a February request for information, including 1,170 identical form letters from a pro-pharma group, yet the agency inexplicably published only 2,475 of them.
It’s not known how many responses HRSA received regarding its estimate of administrative burden this summer. Yet it essentially claimed, a little over two weeks after closing the public comments window, that covered entities are crying wolf.
“Given the limited scope of the Pilot and its reliance on existing data infrastructure and operational processes, HRSA anticipates that any staffing impacts will generally be modest,” the agency said in its notice of the 340B rebates pilot.
The agency has shown little sign that it has taken the concerns of covered entities and other safety net stakeholders into consideration in designing its revised rebate pilot plan. HRSA estimates that annual administrative costs for the 15,249 covered entities registered in the 340B program will total $523.3 million — an average of $34,320 per entity, though it acknowledges that amount may vary by type.
In its own response to HRSA’s ICR, the American Hospital Association said the agency omits the “float costs” of paying full WAC pricing in its calculations, among other ancillary expenses. It also says HRSA appears to have accepted the drug industry’s claim that reporting all this data is routine and in line with what they already collect for billing payers.
The AHA notes that HRSA’s 45-day deadline for submitting claims for rebates is shorter than the 90 to 120 days typically allowed for filing claims for billing, adding that some required information “will not even be available for submission” by then.
“Put simply, the data fields that the Rebate Program will require do not exist in one place, and the idea that all hospitals can seamlessly integrate data between disparate systems is unfounded and unreasonable.”
The task ahead
So what’s next for 340B entities?
There’s been a flurry of 340B legislation introduced in Congress this year. Most encouragingly, the bipartisan Senate “gang of six” 340B work group finally released its long-awaited SUSTAIN 340B Act, which among other things would replace HRSA’s rebate pilot with a neutral, independent claims data clearinghouse to prevent duplicate discounts and diversions — something many covered entities have been arguing for.
There’s also the SECURE 340B Act, a bipartisan proposal from Reps. Scott Peters (D-Calif.) and John Joyce (R-Pa.). It would pause any rebate program for four years while lawmakers work to create a new definition of an eligible 340B patient, and it similarly calls for a federal claims clearinghouse, among other changes to the program.
However, the immediate prospects for any legislation are complicated by the looming midterm elections and the dwindling number of work days in the current congressional session. Lawmakers could always reintroduce the bill next year, when the makeup of the Senate, House or both may be more favorable for its passage, but by then the rebate pilot will have already gotten underway.
Unless, of course, the pilot program is stopped once again in court.
There are no doubt many organizations — the AHA principal among them — whose lawyers are looking closely for a vulnerability to exploit in a lawsuit. But legal experts who have been following the process say HRSA appears to have learned from its previous failed effort and has been careful to follow the administrative steps necessary to avoid violating the law.
So another rescue from the courts is far from guaranteed.
I’ve been working long enough in 340B to say that anything can happen between now and Jan. 1. The last time around, a federal judge blocked HRSA just three days before its rebate pilot was set to launch — a move made more astonishing because it happened in-between the Christmas and New Year’s holidays, a time when many people are taking time off.
Still, I would advise affected covered entities to prepare now as if rebates are a settled matter. Figure out what’s at stake in your organization, how it could affect your cash flow and patient services, and map out how you will handle the administrative strain — especially for appealing denials, which is a whole uncharted aspect of 340B rebates.
I invite you to visit our 340B Rebates Resources Center, which offers helpful tips and access to on-demand webinars. And as always, I invite you to contact me at [email protected] if you have questions or would like to set up a meeting.