CMS 340B Cut: $4.85B Hospital Shock

A proposed 40% cut to 340B drug payments will hit safety-net hospitals and the most vulnerable patients at the worst possible moment.

Safety-net hospitals face a $4.85 billion shock from the 2027 OPPS proposed rule.

On July 2, 2026, CMS released its Outpatient Prospective Payment System proposed rule for calendar year 2027. Buried inside 1,400 pages of regulatory language was a single payment rate change that will hit America's most fragile hospitals harder than any single Medicare policy in a decade.

The agency proposed cutting 340B drug payments from ASP+6% to ASP-33.4%. That is a 39.4 percentage point drop in reimbursement. The total estimated impact: $4.85 billion in reduced revenue for the hospitals, federally qualified health centers, and rural health clinics that serve the country's most vulnerable patients.

This is not a rounding error. This is a structural defunding of the safety net.