A federal district court ruled in favor of hospitals in a dispute over when newly opened outpatient facilities, known as “child sites,” can begin accessing discounted drugs under the 340B program. The court set aside a longstanding policy from the Health Resources and Services Administration (HRSA) that required hospitals to wait until a new site appeared on the hospital’s filed Medicare cost report and was registered in the Office of Pharmacy Affairs Information System (OPAIS) before accessing 340B pricing. Because Medicare cost report filing timelines and quarterly registration windows can delay the process, hospitals argued the policy prevented eligible sites from using 340B savings for up to 23 months even while serving patients. 

The U.S. District Court for the District of Columbia determined that HRSA lacked statutory authority to impose those prerequisites, stating the 340B statute does not allow the agency to add requirements beyond those established by Congress. As a result, hospitals may be able to access 340B pricing for eligible patients at qualifying child sites as soon as those facilities begin operating, rather than waiting months for administrative approval. The decision could have significant financial implications for hospitals expanding outpatient services, though HRSA still retains authority to require registration and verify eligibility. The federal government now has 60 days to decide whether to appeal the ruling.