HR-10134-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Hillary Scholten (D-MI)
What it does
This bill would let certain hospitals that lose their qualifying disproportionate share (DSH) percentage due to Medicaid payment cuts continue to be treated as "covered entities" eligible for the 340B drug discount program through fiscal year 2030. It applies to hospitals that were already participating in 340B as of July 3, 2025, and requires the Government Accountability Office to study how declining Medicaid disproportionate share payments affect rural hospitals and specialty services.
Who benefits
Rural and safety-net hospitals, children's hospitals, and other 340B-participating facilities that would otherwise lose eligibility due to falling DSH percentages; low-income and uninsured patients who rely on discounted drugs at these facilities; hospital associations such as America's Essential Hospitals and the Children's Health Association.
Who is hurt
Drug manufacturers who must provide the mandatory discounts under 340B and may see continued or expanded discount obligations; potentially pharmacies and other entities competing with 340B hospitals for drug sales; federal and state budgets that could see modestly higher administrative costs from continued eligibility exceptions and the required GAO study.
Supporters argue
Supporters argue that hospitals should not lose access to the 340B drug discount program simply because Medicaid payment formula changes reduced their disproportionate share percentage through no fault of their own service to low-income patients. They contend this protects rural and safety-net hospitals from losing a critical revenue stream used to fund care for underserved populations, citing ongoing concerns about rural hospital closures and loss of specialty services like obstetrics and oncology.
Opponents argue
Opponents argue that extending 340B eligibility beyond the statutory disproportionate share threshold undermines the program's original targeting criteria and could allow hospitals that no longer serve a sufficiently high share of low-income patients to keep receiving manufacturer discounts. They contend this adds complexity and cost to a program manufacturers and policymakers already criticize for insufficient oversight of how discounts benefit patients versus hospital margins.
Constitutional context
This bill exercises Congress's spending power under the Taxing and Spending Clause (Article I, Section 8) to modify eligibility criteria for a federal drug discount program tied to Medicaid; it does not raise the kind of Commerce Clause or coercion questions seen in NFIB v. Sebelius because it expands rather than restricts eligibility and imposes no new mandate on states or individuals.
Checks and balances
Congress would set a temporary statutory exception to existing eligibility rules administered by the Health Resources and Services Administration, with the Comptroller General (an independent legislative-branch officer) required to report back to Congress, preserving legislative oversight of the executive agency's implementation.
Historical precedent
Congress has previously modified 340B eligibility and DSH-related formulas through legislation such as the Consolidated Appropriations Acts, though this specific temporary eligibility carve-out tied to a 2030 sunset is a narrower, targeted adjustment rather than a broad precedent-setting change.