Medicare’s Proposed Cut to 340B Drug Payments Would Hit Safety-Net Hospitals While Benefiting For-Profit Hospitals

(Authors: Scott Hulver, Zachary Levinson, Juliette Cubanski, and Meredith Freed for The Kaiser Family Foundation Published: Jul 29, 2026)

The recently proposed 2027 Medicare Hospital Outpatient Perspective Payment System (OPPS) rule from the Centers for Medicare & Medicaid Services (CMS) includes a proposal to reduce Medicare’s reimbursement for 340B drugs. The proposal would reduce reimbursement for 340B drugs from average sales price (ASP) plus 6% (what Medicare generally pays for Part B outpatient drugs administered by providers) to ASP minus 33.4%, a 37% reduction. CMS indicated that this change would better align Medicare reimbursement with hospitals’ costs of acquiring 340B drugs. Continue reading here…

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