02/19/2026

HHS Drops 340B Rebate Pilot, Seeks Input on Next StepsHHS Drops 340B Rebate Pilot, Seeks Input on Next Steps

The U.S. Department of Health and Human Services has formally withdrawn its proposed 340B Rebate Model Pilot Program following federal court rulings that blocked implementation. At the same time, the Health Resources and Services Administration (HRSA) has issued a new Request for Information (RFI), reopening debate over whether the 340B program should move from upfront discounts to a rebate model.

What happened

• HRSA’s 2025 pilot would have required covered entities to pay full Wholesale Acquisition Cost upfront and seek rebates later from manufacturers.
• Hospital groups, including the American Hospital Association, challenged the model in federal court.
• A U.S. District Court blocked the pilot in December 2025, citing deficiencies in the agency’s administrative record.
• The federal government later moved to vacate the program entirely rather than continue litigation.
• Result: The pilot is withdrawn. The current upfront discount structure remains in place.

What HRSA is asking now

The February 13, 2026 RFI signals a reset, not abandonment. Submit comment by March 19, 2026.

HRSA is seeking feedback on:

• Whether the 340B statute permits a rebate model instead of upfront discounts
• Cash-flow implications for covered entities
• Administrative costs, staffing, and IT system changes
• Safeguards to prevent inappropriate rebate denials
• Potential program integrity concerns

No new rule has been proposed. This is an information-gathering stage.

Why it matters to nonprofit aging services providers

Many nonprofit hospitals and health systems that participate in 340B partner with or operate:

• Hospice programs
• Skilled nursing facilities
• Life plan communities
• Outpatient clinics serving older adults

A rebate model could:

• Delay access to drug savings
• Increase short-term borrowing or working capital needs
• Add compliance and billing complexity
• Affect service capacity for mission-driven providers operating on narrow margins

For Ohio providers connected to 340B-covered entities, the financial structure of the program directly affects sustainability.

What’s next

• HRSA will review comments submitted by March 19.
• Future rulemaking is possible but not guaranteed.
• Any structural change would likely require a formal regulatory process.