340B covered entities should carefully review the approved 340B rebate models and the 2026 Medicare Physician Fee Schedule (MPFS) Final Rule provisions on new CMS processes for identifying Medicare Part D claims for 340B drugs.
While the current scope may seem limited or not applicable to certain 340B covered entities, now is the most important time to evaluate the implications of these programs if expanded to all 340B drugs and all 340B covered entities in order to ensure that the concerns of 340B covered entities are appropriately addressed.
340B Rebate Models
As a reminder, although the only drugs currently subject to the 340B rebate models are those that will be subject to the Medicare Part D negotiated prices, the 340B rebate models extend to all 340B covered entity types, all payors and all locations of dispensing/administration of the selected drugs. While the current 340B rebate models are being implemented under a “pilot program,” it is highly likely that 340B rebate models will be expanded to many more drugs in the coming years (possibly even during 2026).
Since the announcement of the approved 340B rebate models, the software platform that will be used for all rebate models approved to-date, Beacon, has released additional information about the implementation of the rebate models and details about operational aspect of the rebate models. All covered entities should familiarize themselves with the Beacon platform and rebate model as soon as possible and should be paying close attention to the following elements (among others):
- Manufacturer requirements for exhaustion of existing accumulations prior to the January 1, 2026, effective date and any post-implementation grace periods for pre-implementation purchases/dispenses. Different manufacturers have different policies; they are not identical cross the eight manufacturers with approved rebate models.
- Typical time periods between drug dispenses and determination of 340B claim status, as related to the required timeframe post-dispense to submit claims for rebates.
- Process for and state requirements/guidance related to reconciliation of Medicaid billing requirements with 340B rebate models.
- Provisions for rebate denials and appeals.
- Changes that may be necessary to current purchasing, distribution and dispensing processes to obtain and maximize 340B rebates.
- Modifications necessary to existing split billing/TPA software to accommodate 340B rebate models, including transitions to physical inventory models.
- Financial impact of 340B rebate models.
Medicare Part D 340B Claims Clearinghouse
The Inflation Reduction Act requires drug manufacturers to provide rebates to Medicare on drugs with prices that increase faster than the rate of inflation. Claims for 340B drugs are excluded from the calculation of required rebate payments and, therefore, must be identified to CMS. CMS has finalized the following policies for the identification and exclusion of Medicare Part D claims for 340B drugs. Note that Medicare Part B claims for 340B drugs are already subject to a 340B-specific modifier (Modifier TB).
Beginning January 1, 2026, CMS will identify Medicare Part D claims for 340B drugs using a data-driven claims-based methodology and a voluntary claims data repository.
Under the data-driven model, CMS will identify claims for 340B drugs billed to Part D by associating prescriber NPIs with 340B covered entities and their registered contract pharmacies. Under this approach, if a claim submitted to Part D includes a prescriber NPI that is associated with a 340B covered entity and the dispensing pharmacy is a 340B covered entity or contract pharmacy, CMS will deem the dispensed drugs to be 340B drugs.
Under the voluntary claims data repository, 340B covered entities would opt-in to participate in a testing period for submission of certain limited claim-level data necessary to identify (and exclude) 340B drugs for the inflation rebate calculations. While the repository is currently framed as voluntary, CMS has made clear in the MPFS that they expect to move towards a mandatory claims data submission process in the near future and that 340B covered entities should take advantage of the “voluntary” period to familiarize themselves with the process for when it becomes mandatory. In particular, CMS states in the MPFS that it expects 340B covered entities that are federally qualified health centers (FQHCs), Critical Access Hospitals (CAHs), and hospitals paid under IPPS to submit claims data during the voluntary “testing period.”
While the data-driven model does not require any action from 340B covered entities, ALL 340B covered entities that use 340B drugs to fill claims that may be covered by Medicare Part D should familiarize themselves with the voluntary 340B claims data reporting process as soon as possible and be prepared for a mandatory 340B claims data reporting- possibly as early as 2027.
