Public Policy Solutions said nonprofit hospital groups are lobbying for a special carveout from HHS's 340B fraud-prevention pilot after profiting from a program meant for vulnerable patients.
According to Public Policy Solutions, "Nonprofit hospital giants are lobbying for a special carveout from HHS's 340B fraud-prevention pilot. They've made billions off a program meant for vulnerable patients. Now they're panicking over basic accountability. If hospitals are using the program as intended, they should have no problem proving claims are legitimate. Patients deserve oversight."
The National Association of Community Health Centers has galvanized thousands of federally qualified health centers to push back against the proposed rebate model, with members sending more than 35,000 emails demanding that the Health Resources and Services Administration drop the rebate requirements or exclude community health centers from the pilot. Federally qualified health centers argue the rebate model would create cash flow crises by forcing them to pay high upfront costs they cannot afford, according to the Washington Examiner.
The American Hospital Association sued HHS in December 2025 to block the pilot, which would require hospitals to submit data within 45 days of dispensing medication to receive a discount. The pilot was scrapped in February 2026 after a federal judge ruled the administration had violated the Administrative Procedure Act, but HRSA reopened the rulemaking process the following week, according to Healthcare Brew.
A 2024 report by the Alliance for Integrity and Reform of 340B found that 85 percent of disproportionate share hospitals earn more in 340B profit than they spend on charity care. In 2022 alone, those hospitals earned $44 billion in 340B profit but spent only $18 billion—just 42 percent of those profits—on charity care, according to AIR340B.
Public Policy Solutions is a Washington, D.C.-based nonprofit organization led by former White House Domestic Policy Advisor Joe Grogan and former CFPB Chief Communications Officer John "CZ" Czwartacki, dedicated to advancing public policy solutions that strengthen national security and promote economic opportunity, according to Public Policy Solutions.
