December 5, 2025

The President’s Message is published in the MHA Weekly News Report, a member only publication of the Montana Hospital Association. To subscribe, click here.

Earlier this week, December 1, the American Hospital Association (AHA), the Maine Hospital Association, and four community-based safety-net hospitals filed in the U.S. District Court for the District of Maine to block the federal government’s new 340B Rebate Model Pilot Program. The plaintiffs are seeking a temporary restraining order to stop the program from taking effect on Jan. 1, 2026. The Montana Hospital Association is monitoring the case closely due to significant implications for Montana’s rural and safety-net providers.

For more than 30 years, the 340B Drug Pricing Program has allowed eligible hospitals and clinics to purchase outpatient drugs at discounted prices and reinvest those savings into patient care. Most Montana hospitals—48 of 63 hospitals—rely on savings from the 340B program to support and expand services, especially for vulnerable populations. Hospitals use savings from the 340B program to provide free or discounted medications for patients, care for the uninsured, behavioral health services, oncology treatment, opioid response programs, and other supports that are foundational to rural and underserved communities.

Under the new rebate model, hospitals would be required to pay full market price up front for drugs and then seek reimbursement from manufacturers only after the drugs are administered. This represents a fundamental reversal of how the program has always operated and, according to the lawsuit, would impose hundreds of millions of dollars in new annual costs, substantial cash-flow pressures, and significant administrative burden on hospitals that already operate on razor-thin margins.

AHA and its co-plaintiffs argue that the Department of Health and Human Services advanced the rebate model through a rushed and opaque process that ignored extensive feedback from more than 1,000 340B hospitals and other stakeholders.

MHA has been actively engaged with Montana’s federal delegation for months to outline the importance of this program to hospitals and, more recently, the negative, statewide impacts this pilot would have. Shifting to a rebate model could jeopardize access in communities that already face workforce shortages, high operating costs, and limited financial cushion. Many hospitals simply won’t have the financial ability to pay upfront for certain drugs, which would threaten local access to these drugs for the patients who need them.

MHA has also been in close communication with AHA and has reviewed the legal action with MHA counsel. The association will continue monitoring the lawsuit and will keep members informed as the case progresses and potential next steps become clearer.

Protecting the 340B program—and the care it makes possible for rural and low-income Montanans—remains a top MHA priority.