As HRSA considers whether to permit changes to the 340B Discount Drug Program, namely shifting to a rebate-based model – safety net hospitals and community health leaders are sounding the alarm. Under debate is whether drugs are sold at full price with rebates issued after purchase, rather than the traditional upfront discount many CHCs rely on to operate.

In an article from Modern Healthcare, Advocates for Community Health’s Elizabeth Lee discussed how managing these rebate programs would create significant administrative burden for health centers, including additional complex reporting requirements. Along with administrative burden, health centers would likely need to hire staff and invest in new technology to manage rebate claims, further straining already limited resources.

Health center leaders warn that the shift from upfront discounts to rebates could undermine critical cash flow for these safety net healthcare providers, making it difficult to budget or, in some cases, even make payroll.

With modest cash reserves, delays in reimbursement could result in serious operational challenges for health centers and critical access hospitals. Under a rebate model, drug manufacturers might deny rebates more frequently, leaving health centers stuck with full drug costs and unable to plan financially.

Read the article on Modern Healthcare.