STAT+: Medicare takes another swing at 340B cuts to hospitals

STAT PlusBreaking News Medicare takes another swing at 340B cuts to hospitals The proposal would effectively transfer funds from safety-net facilities to for-profit hospitals, advocates say Manage alerts for this article Email this article Share this article By Tara BannowJuly 2, 2026 Hospitals and Insurance Reporter Tara Bannow[email protected]Tara covers the business of health care. Her stories focus on hospitals, doctors, and how their business practices affect patients — especially when private equity gets involved. She also writes about health insurance and ideas for improving our broken health system. You can reach Tara on Signal at tarabannow.70. Medicare wants to slash payments to hospitals for drugs acquired through the 340B drug discount program by more than a third beginning next year, after the agency said its surveys found some patients paid more for the drugs than the hospitals did. Under a proposal released Thursday, Medicare would pay hospitals for 340B drugs at their average sales price minus 33.4%, dramatically less than they’re getting currently, which is that price plus 6%. The provision, part of a proposed rule on hospital outpatient payments, represents the latest swing at what’s become a hotly debated drug discount program, viewed by some as a lifeline for safety net hospitals and by others as a profit center for wealthy health systems. Advertisement The proposal drew swift condemnation from groups representing nonprofit and academic hospitals, who said it would disproportionately harm safety-net providers. That’s because only these non-profit facilities are eligible for 340B, while for-profit hospitals are not. Medicare’s proposed rule shows a 7.4% pay increase to for-profit hospitals under the 340B adjustment. STAT+ Exclusive Story Already have an account? Log in This article is exclusive to STAT+ subscribers Unlock this article — plus in-depth analysis, newsletters, premium events, and news alerts. Already have an account? Log in Monthly $39 Totals $468 per year $39/month Get Started Totals $468 per year Starter $30 for 3 months, then $399/year $30 for 3 months Get Started Then $399/year Annual $399 Save 15% $399/year Get Started Save 15% 11+ Users Custom Savings start at 25%! Request A Quote Request A Quote Savings start at 25%! 2-10 Users $300 Annually per user $300/year Get Started $300 Annually per user View All Plans To read the rest of this story subscribe to STAT+. Subscribe Log In CMS, Drug prices, hospitals, Medicare, Pharmaceuticals, Policy, STAT+ Submit a correction requestReprints Tara Bannow Hospitals and Insurance Reporter Tara covers the business of health care. Her stories focus on hospitals, doctors, and how their business practices affect patients — especially when private equity gets involved. She also writes about health insurance and ideas for improving our broken health system. You can reach Tara on Signal at tarabannow.70. Newsletter Unpacking the business — and secretive inner workings — of the U.S. health care industry Recommended Breaking News July 2, 2026 STAT Plus: Elevance sues government over $115 million tied to Medicare Advantage star ratings Biotech June 30, 2026 STAT Plus: Anthropic releases Claude Science, a product aimed at researchers, the pharma industry Advertisement Insurance June 29, 2026 STAT Plus: 26 states sue to block Medicaid work requirements Health June 29, 2026 STAT Plus: Longevity, wellness physicians named to panel advising FDA on peptides Pharma June 25, 2026 STAT Plus: Democrats press White House on who got special access to Eli Lilly’s new obesity drug Subscriber Picks