January developments could affect reimbursement, cash flow, purchasing, and program operations. The time to understand the exposure is now.

By Katy Lees

Four operational and financial changes could reach 340B covered entities on January 1, 2027. They include a proposed change to Medicare reimbursement for 340B-acquired drugs, a revised federal 340B rebate model pilot, an expansion of Medicare’s Maximum Fair Price (MFP) program, and a proposed mandatory repository for Medicare Part D claims identified as 340B.

Each carries a different legal status and a different effect on covered entities, but all warrant attention before the end of the year.

Tracking the policy news is only the first step. Covered entities need to translate each development into organization-specific impact. That requires knowing how the program operates across sites and pharmacies, where the affected medications are used, and whether the available data supports analysis and forecasting. A national estimate or policy summary can identify the issue. It cannot tell an organization what the issue means for its patients, workflows, or finances.

The 2027 readiness question:

Does the organization have enough program knowledge and transaction-level data to identify the affected volume, estimate the financial exposure, redesign the workflow, and monitor receipt of expected payments?

1. Proposed OPPS reimbursement changes

CMS has proposed paying for separately payable 340B-acquired drugs under the Hospital Outpatient Prospective Payment System (OPPS) at average sales price (ASP) minus 33.4%, beginning January 1, 2027. The proposal draws on CMS’s 2026 hospital acquisition-cost survey. CMS estimates the change would reduce Original Medicare drug payments by $4.55 billion and beneficiary cost-sharing by $1.15 billion in the first year. Because the change would be budget-neutral within OPPS, CMS also proposes raising payments for non-drug services by an equivalent aggregate amount.

The policy is not final as of publication, but covered entities do not need to wait for the final rule before beginning to evaluate it. Impact will vary by 340B drug utilization, Medicare volume, service mix, hospital type, and whether the location is paid under OPPS. An organization with high-cost infusion or specialty drug volume may see a different result from one whose OPPS revenue leans toward non-drug services.

Covered entities should also determine whether their Medicare Advantage plans will follow the revised OPPS methodology. Many payer contracts incorporate CMS payment methodologies or calculate reimbursement as a percentage of Medicare rates, though the specific language and implementation vary by plan. Organizations should review their contracts, validate expected payment changes with payers, and model the effect using their actual payer and patient mix.

For some covered entities, the Medicare Advantage impact could exceed the direct effect on fee-for-service reimbursement. Forecasting only the fee-for-service change may understate total exposure.

CMS has also proposed increasing the 340B remedy reduction, applied to the OPPS conversion factor for non-drug items and services, from 0.5% to 3% in 2027 for affected hospitals. That reduction is separate from the proposed drug payment methodology. Both belong in the same forecast so leaders can see the combined effect rather than reviewing either adjustment in isolation.

2. The revised 340B rebate model pilot

HRSA’s revised 340B Rebate Model Pilot Program lets qualifying manufacturers of medications selected for the Medicare Drug Price Negotiation Program for 2026 and 2027 deliver the 340B price through a post-dispense rebate rather than an upfront discount. Approved manufacturer plans are scheduled to take effect January 1, 2027. Manufacturer, product, platform, and implementation details may continue to evolve, but covered entities should plan for the possibility that multiple affected products will move to a different process.

Under a rebate approach, the covered entity pays a higher acquisition price, submits claim-level data after dispensing, and receives the 340B value only after the transaction is validated. HRSA’s framework requires participating manufacturers to issue rebates within 10 calendar days of data submission. Even with that standard in place, organizations take on more responsibility for submission timeliness, denial follow-up, payment reconciliation, and working-capital exposure. The full interval from purchase to rebate receipt will run longer than the manufacturer payment window, since it also covers dispensing, 340B qualification, data preparation, and submission.

Covered entities should understand who will validate requests, which data elements will be required, how manufacturer-specific conditions will be applied, and what happens when a request is denied. A pharmacy claim’s adjudication status does not necessarily establish its final 340B status. Many covered entities identify eligible transactions after adjudication through third-party administrator logic, replenishment rules, and compliance review. The workflow must also account for reversals, late-arriving data, accumulated quantities, and later eligibility determinations.

Preparation starts with estimating the gross cash outlay by product and location. It also means defining responsibility for claim submission, reconciliation, and cash application. Aging reports track unpaid or denied rebates, and a documented escalation path matters when a manufacturer or intermediary reaches a determination the covered entity disputes. Underlying all of it is the ability to trace each transaction from purchase and dispense through request, decision, payment, denial, reversal, and final resolution.

3. MFP expansion and a changing nonduplication process

The Medicare Drug Price Negotiation Program will expand from 10 to 25 drugs on January 1, 2027, when the Maximum Fair Price (MFP) takes effect for 15 additional Medicare Part D selected drugs. 

The new group includes: 

• Ozempic, Rybelsus, and Wegovy
• Trelegy Ellipta
• Xtandi
• Pomalyst
• Ofev
• Ibrance
• Linzess
• Calquence
• Austedo and Austedo XR
• Breo Ellipta
• Xifaxan
• Vraylar
• Tradjenta
• Janumet and Janumet XR
• Otezla and Otezla XR

For covered entities, the central requirement remains nonduplication. If the 340B ceiling price is lower than the MFP, the manufacturer is not required to provide access to the MFP for that unit. If the MFP is lower, the manufacturer must provide access in a manner that accounts for the 340B ceiling price already available to the covered entity.

The operational process for meeting that requirement may change in 2027. For manufacturers participating in HRSA’s 340B Rebate Model Pilot Program, the rebate process is intended to validate 340B eligibility and prevent duplication between the 340B price and the MFP. Covered entities would purchase the drug at a higher price, submit claim-level data, and receive the appropriate 340B rebate after validation. For these products, the MFP and 340B processes function as connected components of a single nonduplication workflow rather than two independent payment processes.

The second year of MFP implementation will not necessarily resemble the first. For manufacturers and products included in the rebate pilot, covered entities may face new submission requirements, validation rules, payment timing, denials, and reconciliation processes. For manufacturers outside the pilot, covered entities may continue to rely more heavily on the Medicare Transaction Facilitator (MTF) and existing MFP effectuation processes. A single organization could run multiple workflows at once, depending on the manufacturer, product, patient, claim, and relationship between the MFP and the 340B ceiling price.

Organizations should review the selected-drug file at the NDC level, identify which manufacturers and products are subject to an approved rebate model, quantify affected Medicare Part D utilization, and document the applicable pathway for each product. They should also verify MTF connectivity and determine how data will flow among internal systems, pharmacies, third-party administrators, rebate platforms, manufacturers, and the MTF.

Experience from the first year of MFP implementation remains valuable as a baseline rather than a blueprint. Covered entities should evaluate where payments stalled, which eligibility assumptions proved inaccurate, how denials and reversals were handled, and which transactions required manual intervention. From there, they can determine which processes remain relevant and which will change under the rebate pilot. The 2027 expansion adds more than drugs to the list. It creates an environment in which covered entities may need to manage several nonduplication and payment pathways at the same time.

Covered entities and pharmacies should also account for the reimbursement impact of MFP-eligible prescriptions. When the Part D or PBM claim payment is based on the MFP, the pharmacy receives lower reimbursement for the prescription. That claim reimbursement is separate from any MFP effectuation payment or refund and from any 340B rebate. Organizations should model and reconcile each component separately by drug, payer, and pharmacy, then confirm that all amounts due are received. Even when the nonduplication process works as intended, lower prescription reimbursement could materially affect pharmacy margin, contract pharmacy economics, and the overall value generated through the 340B Program.

4. Medicare Part D 340B claims repository

CMS established the Medicare Part D Claims Data 340B Repository as a voluntary reporting process beginning October 1, 2026. Covered entities may submit data directly or arrange for a third-party administrator or other partner to submit on their behalf. CMS is using the initial submissions to evaluate whether actual claim-level data can reliably identify 340B units that should be excluded from Medicare Part D inflation rebate calculations.

CMS has proposed making repository reporting mandatory for applicable Medicare Part D 340B claims with dates of service beginning January 1, 2027. The proposal would require covered entities to report specified claim-level data for Part D drugs dispensed by the entity or its contractors for which the manufacturer provided a 340B discount. Repository data do not currently replace CMS’s existing claims-based methodology, but mandatory reporting would expand both covered-entity responsibility and federal visibility into Part D 340B utilization.

A working federal repository could establish a baseline for a broader, government-managed 340B clearinghouse. A neutral federal process could support nonduplication across MFP, inflation rebates, Medicaid, and other federal pricing programs while reducing reliance on separate manufacturer-controlled platforms. That broader use is a possible future direction rather than part of the current proposal.

The potential long-term value does not eliminate the immediate operational burden. Covered entities will need to accurately identify all applicable Medicare Part D 340B claims, consolidate data across pharmacies and third-party administrators, manage corrections and late 340B qualification, and confirm the completeness of submissions made on their behalf. Organizations should begin identifying data owners and testing whether their systems can produce the required information completely and consistently.

Know your program. Know your data.

The common requirement across all four developments is organizational visibility. Covered entities should be able to answer, with data, where affected drugs are purchased and dispensed, which payers and patients are involved, how 340B eligibility is determined, when the organization receives the expected value, and where transactions remain unresolved.

A practical readiness assessment should include:

• An inventory of affected drugs at the NDC and payer level across mixed-use, entity-owned, specialty, and contract pharmacy settings
• Financial scenarios for the proposed OPPS payment reduction, non-drug redistribution, remedy offset, rebate cash timing, and MFP expansion
• Transaction-level reconciliation that connects purchase, dispense, eligibility, replenishment, submission, payment, denial, reversal, and resolution
• Ownership and escalation standards across pharmacy, finance, revenue cycle, information technology, legal, compliance, and external vendors
• Executive reporting that distinguishes finalized requirements from proposed policies and legislative possibilities

Federal legislation: the next horizon

Beyond the January changes, covered entities should continue monitoring federal legislation that could reshape the 340B Program more broadly. The leading proposals are not current operating requirements, and enactment is uncertain. They do show where bipartisan and congressional attention is concentrated. The recurring themes are patient eligibility, contract pharmacy access, child sites, duplicate-discount prevention, transparency, reporting, financial assistance, and the mechanism for providing the 340B price.

Three proposals lead the discussion:

• SUSTAIN 340B Act: The bipartisan Senate proposal would codify the use of contract pharmacies without numeric or geographic limits, establish a statutory patient definition, address referrals and child sites, add covered-entity reporting and oversight, create an independent data clearinghouse, and transition away from the rebate pilot.
• SECURE 340B Act: The bipartisan House proposal would pause rebate models for 4 years while establishing patient, contract pharmacy, data-sharing, and transparency standards, and would direct HRSA to use an independent clearinghouse to validate claims and help prevent duplicate discounts.
• Cassidy discussion draft: The 340B for Patients Act discussion draft from Sen. Bill Cassidy, chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, would reach further than the other two and, in several areas, impose tighter requirements on patient eligibility, hospital and off-site facility standards, contract pharmacies, reporting, patient benefit, and permissible pricing mechanisms, including rebates.

The bills differ substantially, but they reinforce the same readiness message. Covered entities should know how their program functions, be able to support eligibility and compliance decisions, and maintain credible data describing both program activity and organizational impact. Those capabilities will be valuable regardless of which legislative provisions advance.

Prepare for what is known, and measure what is not

Covered entities do not need perfect certainty to begin preparing for 2027. MFP expansion is coming. The rebate pilot has a January implementation pathway. The proposed OPPS changes are large enough to model before they are finalized. Federal legislation is less immediate, but it provides a clear view of the issues likely to shape future oversight and operations.

Being informed is the starting point. Readiness comes from translating policy into the specific drugs, claims, sites, workflows, vendors, and dollars within an organization. The covered entities best positioned for 2027 will be those that pair policy awareness with detailed program knowledge and dependable data, then use all three to forecast, prepare, and respond.

References

Centers for Medicare & Medicaid Services. (2025). Negotiated prices for initial price applicability year 2027.

Centers for Medicare & Medicaid Services. (2026). CY 2027 OPPS / ASC proposed rule fact sheet.

Centers for Medicare & Medicaid Services. (2026). CY 2027 physician fee schedule proposed rule, Medicare Part D 340B claims data repository provisions.

Health Resources and Services Administration. (2026). Notice regarding 340B rebate model pilot program, 91 FR 48883.

Peters, S., et al. (2026). SECURE 340B Act materials.United States House of Representatives.

Senate 340B Bipartisan Working Group. (2026). SUSTAIN 340B Act summary and bill text.

U.S. Senate Committee on Health, Education, Labor and Pensions. (2026). 340B Drug Pricing Integrity and Affordability for Patients Act discussion draft.