340B ACCESS Act

Bill Number

H.R. 5256

Origin Chamber

House

Congress

119th Congress, Session 1

Status

Introduced

Latest Action

2025-09-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2025-09-19T11:23:14Z

AI-Generated Summary

Purpose

The 340B ACCESS Act aims to reform the 340B drug pricing program under the Public Health Service Act. The 340B program allows certain healthcare providers, known as "covered entities" (like safety-net hospitals and clinics), to purchase outpatient drugs at steep discounts from manufacturers. These discounts help stretch limited resources to serve low-income, uninsured, or vulnerable patients. The bill seeks to tighten eligibility rules, prevent program abuse (such as duplicate discounts or resale of drugs), ensure discounts benefit patients through affordability measures, improve transparency and oversight, and create mechanisms to verify compliance while maintaining access to affordable care.

Key Provisions

• Redefinition of Key Terms:
• Patient: Narrows the definition to individuals receiving in-person health services at a covered entity site (or approved off-site locations) within the scope of the entity's federal grant or contract. Excludes prescriptions from non-entity providers (with limited exceptions for care coordination), telehealth without recent in-person exams (unless for certain disabled patients), and cases where only drug administration occurs without broader care.
• Specified Nonhospital Covered Entity: Targets large nonhospital entities (e.g., those with over $1 billion in revenue or hospital affiliates) for stricter rules.

• Preventing Duplicate Discounts and Oversight:
• Requires states and covered entities to use specific methods to avoid "duplicate discounts" (e.g., getting both 340B discounts and Medicaid rebates for the same drug). Mandates regulations for identifying and excluding 340B drugs from Medicaid rebate requests.
• Allows audits of entities' use of 340B savings (called "margin," the difference between drug costs and reimbursements) to ensure compliance and proper use for patient care.

• Hospital Child Site Requirements (Off-Campus Facilities):
• Defines "child sites" as qualifying off-campus outpatient facilities wholly owned by hospitals, meeting Medicare standards, providing non-drug services, and located in health professional shortage areas.
• Requires child sites to match or exceed the parent hospital's charity care levels and Medicaid outpatient revenue shares. Entities must register, certify annually, and deregister non-compliant sites, with penalties for violations (e.g., $2,500 per violation, adjusted for inflation).

• Contract Pharmacies:
• Allows covered entities to use contract pharmacies (external pharmacies dispensing 340B drugs) under written agreements, but limits certain hospitals to 5 contracts (excluding mail-order).
• Mandates registration, compliance procedures to prevent duplicates or resale, and location in the entity's "service area" (contiguous census areas). Mail-order use is restricted to specific entity types and patient locations.
• Requires fees to be flat amounts (not percentage-based on discounts) and capped at 125% of average dispensing fees. Penalties escalate for repeat violations, up to removal from the program for 2+ years.

• Patient Affordability Requirements:
• Hospitals: Must implement sliding fee scales capping out-of-pocket costs for eligible low-income or uninsured patients (e.g., $0 if below poverty line; up to $50 if above 200% of poverty line, adjusted for inflation). Applies at entity sites, child sites, and contract pharmacies.
• Nonhospital Entities: Must provide discounts to prevent denial of access based on ability to pay, if required by their federal grant.
• "Eligible patient" includes uninsured or low-income insured individuals. Violations trigger $2,500 penalties per incident.

• Nonhospital Entities and Subgrantees:
• Nonhospital covered entities must be nonprofit/public, limit drug purchases to grant scope, and oversee subgrantees (e.g., clinics funded by the entity) with enforceable agreements.
• Subgrantees must register sites, prove high Medicaid enrollment in some cases, and exit if funding ends. In-kind contributions (e.g., supplies) from certain entities have value thresholds.

• Data Submission and Reporting:
• Requires claims to include 340B modifiers (codes identifying discounted drugs) for Medicare/Medicaid and other payers.
• Entities must submit detailed claim-level data (e.g., drug codes, quantities, patient info) to a new clearinghouse within 45 days.
• Annual reports on grant scopes, patient numbers by insurance type, charity care costs, uncompensated care, and margin use (e.g., for medical/dental care, discounts). Publicly published data.

• Hospital Eligibility Revisions:
• Tightens rules for private nonprofit hospitals contracting with governments: Contracts must cover at least 10% of care costs for low-income uninsured, be public, and enforceable.
• Urban disproportionate share hospitals must rank in top 40% statewide for Medicaid outpatient revenue and uncompensated care.
• Prohibits "extraordinary collection actions" (aggressive debt tactics) against low-income/uninsured patients.
• New charity care threshold: Entities must spend at least as much on charity care as 340B margin or deregister (with re-entry hurdles).

• Audits, Clearinghouse, and Fees:
• Annual audits of 10% of certain hospital contracts; removal for non-compliance.
• Establishes a third-party 340B claims data clearinghouse to detect duplicates, integrate with Medicare/Medicaid data, and provide manufacturer access (with privacy protections). Resolves violations by refunding manufacturers.
• Caps third-party administrator fees as flat amounts at fair market value; similar for contract pharmacies. Violations: 10x fee penalty.

• Equitable Treatment and Clarifications:
• Prohibits health plans, insurers, and pharmacy benefit managers (PBMs) from discriminating against 340B entities/pharmacies (e.g., lower reimbursements, network exclusions, or blocking affordability discounts). Penalties up to $5,000/day for PBMs.
• Federal 340B rules supersede conflicting state/local laws.
• Applies anti-discrimination rules to Medicare Parts C and D.

• Effective Date: Most provisions take effect 1 year after enactment; some (e.g., child sites) 120 days; regulations within specified timelines.

Significant Changes to Existing Law

• Stricter Eligibility and Patient Definition: Previously vague "patient" rules are now explicit, reducing potential for broad dispensing (e.g., excluding most telehealth, off-site prescriptions). Hospital eligibility narrows (e.g., urban hospitals must meet top-40% thresholds; child sites face new charity/Medicaid hurdles), potentially disqualifying some entities.
• Enhanced Oversight and Penalties: Introduces mandatory data submission, a clearinghouse for real-time duplicate detection, and escalated penalties (e.g., interest on refunds, removals). Audits expand to margin use and contracts.
• Affordability Mandates: New sliding fee requirements for hospitals and policy-based discounts for nonhospitals, absent in prior law, ensure savings reach patients directly.
• Contract Pharmacy Limits: Adds caps on numbers, fees, and locations; requires written agreements and compliance audits, curbing expansion seen in recent years.
• Transparency Boost: Annual public reporting on savings use and patient demographics replaces voluntary disclosures.
• Anti-Diversion Measures: Explicitly prohibits resale/transfer of 340B drugs; integrates with other programs (e.g., Inflation Reduction Act's drug price negotiations).

Potential Impacts

• Government Agencies: The Department of Health and Human Services (HHS) and Health Resources and Services Administration (HRSA) face increased workload for regulations, audits, clearinghouse management, and penalty enforcement. States must update Medicaid systems to exclude 340B claims from rebates, potentially reducing administrative errors but raising short-term costs. Medicare/Medicaid programs gain tools to prevent overpayments.
• Citizens/Patients: Low-income and uninsured individuals may see lower out-of-pocket drug costs via sliding fees, improving access in safety-net settings. However, stricter rules could limit program participation, reducing drug availability in some rural/underserved areas if entities deregister.
• International Relations: No direct impact; the bill focuses on domestic drug pricing and healthcare delivery.

Main Stakeholders Affected

• Covered Entities: Safety-net hospitals, clinics, and federally qualified health centers—may face tighter eligibility, more reporting, but clearer rules to sustain operations.
• Drug Manufacturers: Gain better duplicate prevention and data access to recoup improper discounts; required to ship to contract pharmacies but protected from double payments.
• Pharmacies: Contract and entity pharmacies must comply with new agreements, fees, and modifiers; independent pharmacies benefit from anti-discrimination protections.
• Patients: Especially low-income, uninsured, or Medicaid-enrolled individuals served by 340B entities—potential for affordable drugs but risk of reduced access if providers exit.
• Payers and PBMs: Health insurers, Medicare/Medicaid, and PBMs must submit data, avoid discrimination, and adjust reimbursements, possibly increasing costs if 340B usage grows under new safeguards.
• Government: HHS/HRSA for oversight; states for Medicaid compliance.

Notable Legal, Constitutional, or Political Implications

• Legal: Introduces civil monetary penalties (e.g., $2,500–$5,000 per violation, adjusted for inflation) enforced by HHS's Office of Inspector General, with procedures mirroring Social Security Act fraud rules. Supersedes state laws on 340B operations, potentially preempting local regulations (e.g., on pharmacy networks). Enhances manufacturer recourse via refunds and audits but limits state interference.
• Constitutional: No major issues; aligns with Congress's commerce clause authority over interstate drug pricing and spending clause for federal grants. Privacy protections for health data comply with HIPAA.
• Political: Reinforces the program's safety-net mission (explicitly stated) while addressing criticisms of abuse by large entities, appealing to fiscal conservatives and manufacturers. May spark debates over access vs. cost control—providers could oppose eligibility cuts, while payers/manufacturers support transparency. Bipartisan potential as it balances equity with accountability, but implementation challenges (e.g., rulemaking deadlines) could lead to litigation.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Carter, Earl L. "Buddy" [R-GA-1]

Cosponsors (1)

Rep. Harshbarger, Diana [R-TN-1]

Recent Actions

• 2025-09-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-09-10: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-09-10: Introduced in House
• 2025-09-10: Introduced in House

Bill Versions

• 340B Affording Care for Communities and Ensuring a Strong Safety-net Act — issued 2025-09-10 — PDF (142 pages)