When Hospital 'Community Benefits' Benefit Relatively Few

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

The proverbial dead horse highlights how drug purchases under the 340B Drug Pricing Program exceeded $100 billion for the first time in 2025—an increase from 2024 of 22.8%—according to the Health Resources and Services Administration (HRSA), with hospitals accounting for a combined $83,936,162,423 (83.9%) across all hospital types (HRSA, 2026). Today’s fast-paced news cycle dictates a look at the primary vehicle used by 340B hospitals to claim they are using 340B Program revenues to serve patients: “Community Benefits”.

Photo Source: Debt.com

According to a 2025 report released by the American Hospital Association (AHA), a special interest group that bankrolls inside-the-beltway lobbying firms pretending to care about patient access to care, the 1,166 340B hospitals examined by Research Triangle Institute (RTI) International spent $99,473,767,285 on “Total Benefits to the Community” (AHA, 2025).

What’s key here is how RTI and the AHA have defined “Community Benefit.” It truly amounts to nothing more than profit-driven shenanigans.

By their definition, “Community Benefits” include the following:

• Type of Benefit Provided (1,166 individual hospitals)
• Financial assistance, unreimbursed Medicaid, and unreimbursed costs from means-tested government programs
• Other benefits, including health professions education, medical research, cash and in-kind contributions to community groups
• Community-building activities
• Medicare Shortfall
• Bad debt expense

In fairness, now, this definition didn’t arise out of nowhere. It is a direct response to definitions set by the Internal Revenue Service (IRS) for reporting in Schedule H of the federal Form 990. Schedule H is broken into six parts, each of which is reported to the IRS for data collection purposes. Below are brief descriptions of each Part, but only Parts I, II, III, and VI specifically apply to what the IRS considers to be a “community benefit”:

Part I: Quantifying "Community Benefit"

Part I of Schedule H attempts to quantify the community benefit provided by hospitals annually. Expenses that are reportable in Part I include free care, unreimbursed Medicaid, unreimbursed costs from other means-tested government programs, community health improvement services, health professions education, subsidized health services, research, and contributions to other community groups.

ADAP Advocacy's take: The IRS has not suggested a minimum level of expenditures required to justify tax-exempt status.

Part II: Community Building Activities

Part II quantifies the hospital's community building activities. Although the definition of "community building" may not be obvious at first glance, it is generally understood to refer to programs that are intended to have a beneficial impact upon the health of a community but that do not provide medical care. Examples of community building are housing improvements, economic development, community support, environmental improvements, leadership development, coalition building, community health improvement advocacy, and workforce development.

ADAP Advocacy's take: Despite the inclusion of community building metrics on the Schedule H, these numbers are still separate from the reporting of charity care and community benefit expenditures in Part I. The IRS commentary on the Schedule's final draft reflected the view that the link between community building and health remained tenuous and that the reporting tools in Schedule H are intended, in part, to serve as data collection methods for the IRS to discern what links exist.

Part III: Medicare Shortfalls and Bad Debt

Hospitals incur costs when treating all patients, including patients who are covered by Medicare. Medicare, however, may not reimburse a provider for the total cost of services received by a patient. The difference between the Medicare reimbursement rates and the costs incurred by a hospital are called shortfalls. Schedule H includes a dedicated area in which to report Medicare shortfalls.

ADAP Advocacy's take: Despite the addition of Part III, the IRS does not appear to automatically treat Medicare shortfalls as a direct measure of community benefit. Instead, hospitals are asked to "[d]escribe ... the extent to which any shortfall reported [in Part III] should be treated as community benefit." 

Photo Source: Grammarist

Hospitals regularly engage in billing and collection practices to recoup co-pays, deductibles, and other expenses from patients.

ADAP Advocacy's take: Schedule H allows hospitals to report bad debt in Part III alongside Medicare shortfalls, but bad debt expense may not be reported on the charity care and community benefit table in Part I. As with Medicare shortfalls, filing hospitals must explain what portion of bad debt should be considered community benefit. The IRS comments accompanying the Schedule's final draft indicated that it does not intend to treat any portion of bad debt as a de facto community benefit, citing a lack of consensus on bad debt policies among hospitals.

 Part IV: Management Companies and Joint Ventures

Part IV requires disclosure of any joint ventures in which a hospital participates. 

Part V: Facility Information

Part V requests information about the entity's health care facilities, including questions about compliance with the ACA's requirements.

Part VI: Supplemental Information

Part VI of Schedule H provides an area in which to provide narrative information regarding the amount of community benefit provided. The IRS stated that this area could be used to justify why some portion of Medicare shortfall or bad debt reported in other areas of the Schedule should be considered community benefit. In addition, hospitals may provide details about other community benefits they provide that are not easily quantifiable (Liu, 2024).

As far as ADAP Advocacy can see from the Congressional Research Service (CRS), hospitals are defining “Community Benefit” in a way that does not comply with IRS standards. In fact, of the $99,473,767,285 RTI International reported, 9.5% of those expenditures—including community-building activities, Medicare shortfall, and bad debt expenses—would not be considered a “community benefit” by the IRS.

But observers really need to look further into what “Community Benefits” mean for each category.

When ADAP Advocacy examines Form 990s to review “Charity Care” expenditures, specifically Line 7, Section a is of interest (Figure 1):

Figure 1 – An Example of the Financial Assistance at Cost Line Item in Schedule H on the federal Form 990 Tax Return

Photo Source: ProPublica, 2026

This line specifically asks hospitals to report their provision of “Financial Assistance at cost,” or “charity care.”

The IRS specifically defines “charity care” as, “…free or discounted health services provided to persons who meet the organization's eligibility criteria for financial assistance and are unable to pay for all or a portion of the services.” In fact, the IRS further specifies that charity care DOES NOT INCLUDE, “…bad debt or uncollectible charges that the organization recorded as revenue but wrote off due to a patient's failure to pay, or the cost of providing such care to such patients; the difference between the cost of care provided under Medicaid or other means-tested government programs or under Medicare and the revenue derived therefrom; self-pay or prompt pay discounts; or contractual adjustments with any third-party payors” (Levinson et al., 2022).

This is why, when looking at the very friendly report published by the AHA, the entirety of their “Community Benefits” reporting should be questioned.

Why?

Because on virtually every Form 990 we examined that included full Schedule H reporting, Line 7, Section b (Medicaid), was significantly higher than Section a.

This means that the provision of “Financial Assistance at cost” makes up a vanishingly small percentage of the entirety of Schedule H reporting.

This prompts a vital question: Should the other sections in Line 7 still be considered a “community benefit”?

Absolutely.

But patients need clear information on how those hospitals are using 340B revenues to DIRECTLY benefit patients. Absent that, GoFundMe pages most likely will continue to serve as the "community benefit" standard for most patients straddled with hospital medical debt.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] American Hospital Association. (2025, September). 340B Hospital Community Benefit Analysis. Chicago, IL: American Hospital Association: Data & Insights: Guides & Reports. https://www.aha.org/system/files/media/file/2025/10/340b-hospital-community-benefit-analysis.pdf

[2] Health Resources and Services Administration. (2026, July). 2025 340B Covered Entity Purchases. Rockville, MD: United States Department of Health and Human Services: Health Resources and Services Administration: Office of Pharmacy Affairs: 340B Drug Pricing Program: Program Updates. https://www.hrsa.gov/opa/updates/2025-340b-covered-entity-purchases

[3]Levinson, Z., Hulver, S., & Neuman, T. (2022, November 03). Hospital Charity Care: How It Works and Why It Matters. San Francisco, CA: KFF: Topics: Health Costs. https://www.kff.org/health-costs/hospital-charity-care-how-it-works-and-why-it-matters/

[4] Liu, E. C. (2024, April 15). Legal Requirements for Section 501(c)(3) Hospitals. Washington, DC: Congressional Research Service. https://www.congress.gov/crs-product/R48027

[5] ProPublica. (2026). Full text of "Full Filing" for fiscal year ending Nov. 2023. New York, NY: ProPublica: Nonprofit Explorer: California: Oroville Hospital. https://projects.propublica.org/nonprofits/organizations/941634554/202402859349301695/full

Medical Debt Soars, Despite 340B Purchases Passing $100 Billion

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

Drug purchases under the 340B Drug Pricing Program exceeded $100 billion for the first time in 2025—an increase from 2024 of 22.8%—according to the Health Resources and Services Administration (HRSA), with hospitals accounting for a combined $83,936,162,423 (83.9%) across all hospital types (HRSA, 2026). Yet despite this program’s explosive growth and its inherent promise to expand access to care and treatment for low-income patients, medical debt in the United States now tops $220 billion (Macsata, 2025). Could this be the true reason why patient advocates increasingly find themselves aligned with drug manufacturers on the need to rein in and reform the 340B Program?

Photo Source: ADAP Advocacy | YouTube

Among hospital covered entities (CEs), Disproportionate Share Hospitals (DSHs)—hospitals that serve low-income patients and receive payments from the Centers for Medicare & Medicaid Services (CMS) to cover the costs of providing care to uninsured patients—accounted for $79,235,079,126 (79.2%). Yet despite this influx of cash, nearly two-thirds of adults who carry past-due medical bills owe money directly to hospitals (Macsata, 2025).

By comparison, all Ryan White HIV/AIDS Program (RWHAP) CEs combined accounted for just $3,092,689,404 (3.1%) of all 340B Program drug purchases. State AIDS Drug Assistance Programs (ADAPs) are widely regarded as the Gold Standard among these CEs, and most have operated under a rebate model for decades.

On the heels of HRSA’s new data release, Patients Rising—a national patient advocacy and education group based in Washington, DC—released a report in which they examined over 900 bankruptcy filings across six states (Colorado, Louisiana, Maine, Virginia, Washington, and Wisconsin) and found that 45% of filings listed verified 340B hospitals as creditors, totaling $6.62 million in debt. In some filings, debt accrued at a single 340B hospital accounted for as much as 98% of the household’s total debt. In that specific example, the household's monthly income was just $1,800, while the total debt from Christus Highland was $386,758 (Patients Rising, 2026).

Upon seeing these data, Dr. Adam J. Fein, President of Drug Channels Institute, argues that, due to the unwieldy, undermanaged, and largely unregulated nature of the 340B Program, reform may, in fact, never occur (Fein, 2026).

Dr. Fein argues that this monstrous growth in 340B drug purchases has reached a compound annual growth rate of ~22% per year over the last 15 years (Figure 1), while manufacturer sales have grown by just 7.3%, making 340B the single largest source of manufacturer discounts in the U.S.

Figure 1 – 340B Drug Program Prices: Purchases by Covered Entities, 2010 to 2025

 

Photo Source: Drug Channels Institute

While Dr. Fein does show that pharmaceutical list prices have also grown exponentially, he points to peer-reviewed research that used price-volume-mix decomposition to examine the relative importance of list prices vs. drug utilization (i.e., the number of pills, capsules, syringes, etc. purchased and distributed) to determine whether price increases or utilization were driving the growth of the 340B Program. Zeng et al. found that utilization accounted for an average of 79.6% of 340B growth based on list price, and nearly 100% of growth based on 340B drug prices (Zeng et al., 2025).

Similar to Dr. Fein, ADAP Advocacy has recently argued that CMS, rather than HRSA, should assume control of the 340B Program, in no small part because it has significant regulatory and enforcement staffing resources on hand to administer a program the size of 340B.

But while Dr. Fein’s concern is that Congress will not adequately take up the mantle of reform in the face of the program's enormity, ADAP Advocacy believes it is imperative that they do so. Since March 2025, we've argued that the program is now too big to fail.

In our recent policy paper, "340B Program: The Glue That Should Hold Our Healthcare System Together", we argue that Congress should reform the 340B program to implement a system-wide rebate model (similar to those currently working for state ADAPs), as well as mandating wholly transparent reporting, clearly defining who qualifies as a “patient” eligible to receive 340B discounted drugs, and establishing compliance and enforcement standards that require all covered entities to open disclose how much in rebates they receive and how those revenues are spent in alignment with both the letter and the spirit of the 340B statute.

Photo Source: ADAP Advocacy

ADAP Advocacy stands firmly in our conviction that the 340B Program must be fundamentally reformed. To be clear, no one side—save for patients in need of care—is faultless in allowing this program to spin wildly out of control. There is culpability to go around; but only one side—drug manufacturers—is required to provide discounted prices and rebate revenues to covered entities, and it is far easier for pundits, politicians, and even patients to paint pharmaceutical companies as the bad guys for drug pricing while holding hospitals and other covered entities blameless.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] ADAP Advocacy. (2026, July 27). ADAP Advocacy Calls for CMS to Oversee 340B Drug Pricing Program. Washington, DC: ADAP Advocacy. Press Room. https://www.adapadvocacy.org/s/2026_ADAP_Press_340B_Oversight_CMS_072726.pdf

[2] Fein, A. J. (2026, July 15). The 340B Program Hit $100 Billion in 2025: Has It Become Too Big to Reform? Philadelphia, PA: Drug Channels Institute: Drug Channels. https://www.drugchannels.net/2026/07/the-340b-program-hit-100-billion-in.html

[3] Health Resources and Services Administration. (2026, July). 2025 340B Covered Entity Purchases. Rockville, MD: United States Department of Health and Human Services: Health Resources and Services Administration: Office of Pharmacy Affairs: 340B Drug Pricing Program: Program Updates. https://www.hrsa.gov/opa/updates/2025-340b-covered-entity-purchases

[4] Macsata, B. M., Laws, J., Hopkins, M. J. & Sosa, J. (2025, April). Patient Medical Debt: Findings from Quantitative Patient Survey in the United States. Washington, DC: ADAP Advocacy. https://static1.squarespace.com/static/698f8fa09fc8884466a1becd/t/69d85991b19c033c07b2a52b/1775786385556/2025_ADAP_Project_RW_340B_Asset_17_Medical_Debt_Survey_Report_04-23-25.pdf 

[5] Macsata, B. M., Anthony, G., Hopkins, M. J., & Sosa, J. (2026, July 08). 340B Program: The Glue That Should Hold Our Healthcare System Together. Washington, DC: ADAP Advocacy: Policy Center: 340B: Policy Papers. https://www.adapadvocacy.org/s/2026_ADAP_Project_RW_340B_Asset_32_340B_Glue_Should_Hold_Healthcare_Together_061526.pdf

[6] Patients Rising. (2026, July). Medical Bankruptcy in the United States. Washington, DC: Patients Rising. https://6015202.fs1.hubspotusercontent-na1.net/hubfs/6015202/01-PatientsRising-u4m/Research%20Papers/Medical-Bankruptcy-in-America-and-340B_6-State-Analysis-White%20Paper-email..pdf

[7] Zeng, S., Sarraille, W., & Martin, R. (2025, May 21). What is driving 340B growth: utilization or price? Health Affairs Scholar, 3(6), qxaf104. https://doi.org/10.1093/haschl/qxaf104

Insurers Regularly Delay, Deny, and Defend Their Treatment Malfeasance

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

New research conducted by Johns Hopkins Bloomberg School of Public Health and published in the Journal of the American Medical Association Health Forum found that health insurance denials for brand-name medications increased by 67% between 2018 and 2024, from 24.3% in 2018 to 40.7% in 2024 (Wang et al., 2026). It is yet the latest news showcasing how insurance companies are putting the squeeze on patients.

Photo Source: Johns Hopkins

Wang et al. utilized 2024 IQVIA pharmacy claims data to identify branded drug dispensations that faced initial prior authorization (PA) rejections and completed the PA process, calculating the frequency of same-day PA reviews and final approval rates.

They found that nearly one-third of initial prescription fill attempts (32%) were rejected because of formulary exclusions, including the medication not being covered by the patients’ insurance plan or because of utilization management rules (PA requirements). Of those rejections, nearly half (48.4%) were not followed by a prescription fill of either the prescribed drug or a drug in the same therapeutic class within 90 days. Those patients who were able to successfully appeal their rejections waited an average of 12 days before receiving their prescriptions (Bloomberg School of Public Health, 2026).

These findings highlight a common strategy employed by health insurance companies in the United States: “Delay, Deny, Defend.” This strategy—also the title of a 2010 book about the insurance industry written by Jay Feinman—is implemented by insurers in order to increase profits. Here’s how it works:

Insurers “delay” the processing of claims—particularly PA claims—in order to frustrate policyholders into abandoning their claims. This is accomplished by introducing bureaucratic obstacles, such as requiring numerous forms or claiming that forms were incorrectly filled out or filed, in the hopes that, by increasing the number and length of delays, insured patients will abandon their treatments.

Insurers also “deny” insurance claims, even if services are listed as being covered by a patient’s explanation of benefits. They utilize this tactic knowing that a vanishingly small percentage of patients will appeal those denials. Data published by KFF in March 2026 found that, among marketplace insurance plan holders, fewer than 1% of denied claims were appealed by policyholders. When policyholders do appeal, two-thirds of those appeals are rejected (Long et al., 2026).

If neither the “delay” nor “deny” tactics are successful, insurers may choose to “defend” their decisions in court. These legal battles can be extensive, last for years, and be both financially and emotionally taxing, which insurers rely upon to dissuade patients from fighting back against them (DeShaw, 2024).

Photo Source: Wikipedia

Wang et al.’s research found significant disparities between payors. Marketplace exchange plans and Medicaid managed care plans had the highest rates of denials—the plans most likely to be utilized by patients who have lower incomes or chronic ailments—with nearly half of all initial prescription attempts denied. Meanwhile, Medicare plans had lower rejection rates. Rejection rates may be lower because the vast majority of prescription drug prices are not negotiable under Medicare plans, while price negotiations are legal for commercial and Medicaid plans, meaning higher profits and payouts under Medicare plans.

As with last week’s blog ("Co-Pay Accumulators Are a Craven Attempt to Accumulate Profit Off the Backs of Patients"), this fundamental truth must be recognized and accepted to understand why these tactics are used:

The purpose of commercial health insurance companies is not to provide access to healthcare services; it is to make profits.

So long as the profit motive exists, insurers will work to ensure that they make those profits, even if it means that patients delay or abandon treatment; even if it means that patients die.

These strategies underpin another looming threat:

State programs, including those in Colorado and Connecticut, have recently been moving HIV antiretroviral medications out of protected drug classes that are generally covered under Medicaid medical benefits, and onto prescription drug formularies, creating lists of approved HIV therapies.

Photo Source: WalletInvestor.com

This poses a significant threat to people living with HIV/AIDS, as virtually every medication used to treat HIV is a brand-name drug. By removing HIV treatments as a medical benefit and placing them into a prescription benefit, patients whose HIV can only be managed by specific drug classes due to drug resistance may face the real risks that their prescriptions may be denied not because those drugs are not effective, but because payors wish to reduce prescription drug expenditures and make profits.

ADAP Advocacy vehemently opposes efforts by states and commercial insurers to profit off of patients. We need legislation that ends these practices. Whether politicians have the political will to enact such policies has yet to be seen.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] Bloomberg School of Public Health. (2026, July 10). Insurance Denials for Brand-Name Prescription Drugs Rose Sharply From 2018 to 2024. Baltimore, MD: Johns Hopkins University: Bloomberg School of Public Health. https://publichealth.jhu.edu/2026/insurance-denials-for-brand-name-prescription-drugs-rose-sharply-from-2018-to-2024

[2] DeShaw, A. (2024, December 11). What Does “Delay, Deny, Defend” Mean? Portland, OR: DeShaw Law: Blog. https://www.deshawlaw.com/blog/what-does-delay-deny-defend-mean

[3] Long, M., Lo, J., & Pestaina, K. (2026, March 24). Claims Denials and Appeals in ACA Marketplace Plans in 2024. San Francisco, CA: KFF: Topics: Patient and Consumer Protections. https://www.kff.org/patient-consumer-protections/claims-denials-and-appeals-in-aca-marketplace-plans-in-2024/

[4] Wang, Y., Levy, J. F., Mattingly, T. J., II, & Anderson, G. (2026, April 17). JAMA Health Forum, 7(4), e260760. https://doi.org/10.1001/jamahealthforum.2026.0760

Co-Pay Accumulators Are a Craven Attempt to Accumulate Profit Off the Backs of Patients

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

Imagine, for a moment, going to a restaurant and paying for your meal with a gift card, only to have the restaurant accept the gift card but demand that you pay the full price of the meal again in cash before you can leave. This is, in essence, how many health insurance companies operate when patients attempt to use drug discount coupons to purchase the prescription medications they might otherwise be unable to afford. This anti-patient insurance policy represents everything wrong with the current American healthcare system.

Photo Source: International Myeloma Foundation

In 2018, insurance companies and Pharmacy Benefit Managers (PBMs), such as Express Scripts and CVS Caremark, began implementing what they called “Co-Pay Accumulators” or “Co-Pay Maximizers” (Schmid, 2018). These policies allow health insurers to accept payments made using manufacturer or other private-entity drug discount cards or coupons, but ignore those payments when counting toward the patient’s deductibles or out-of-pocket maximums.

When this occurs, patients will max out the benefits available through those discount cards or coupons and then be forced to continue paying out-of-pocket costs that should have been covered by those manufacturer payments (Brooks, 2020). This allows insurers to “maximize” their profits by refusing to cover the costs of those medications.

Take the case of Larry Gruber (a fictitious name to protect the patient's identity), a fitness coach from Wilton Manors, Florida. For 16 years, Gruber utilized a manufacturer co-pay coupon to help pay for medication to treat his psoriatic arthritis that would otherwise cost $7,700/month. Using Amgen’s co-pay coupon, Gruber was able to receive his medication and meet his deductible and out-of-pocket maximums each year by February, reducing his in-network and prescription medical costs to $0/month for the remainder of the year.

Then, he was switched to a new health insurance plan offered by Oscar HMO of Florida. This plan used a co-pay accumulator program, allowing them to pocket the payment from Amgen and still requiring him to dip into his personal savings to meet his $10,600 out-of-pocket maximum (Chang, 2026).

Photo Source: Institute for New Economic Thinking

If it sounds like highway robbery, that’s because it is.

To understand why these programs exist, we must first recognize one fundamental truth:

The purpose of health insurance companies in the United States is not to ensure that patients can afford healthcare services; their purpose is to make a profit.

The entire private health insurance business model is intrinsically dependent on denying coverage for goods or services that are “too expensive” for the companies and finding other ways to shift costs that should be borne by insurers onto patients.

Co-pay accumulators are a growing problem, as well. According to an analysis from The AIDS Institute, nearly 40% of commercial insurance programs in the U.S. have implemented accumulator programs (The AIDS Institute, 2026).

Photo Source: The AIDS Institute

It’s important to note that co-pay accumulator programs only exist in the commercial insurance landscape—insurance purchased either through an employer or independently. Patient assistance programs and co-pay coupons/cards can ONLY be used by patients with commercial insurance. Medicaid or Medicare patients cannot use them because of a federal anti-kickback law that prohibits manufacturers from offering any payment that might persuade a patient to choose a name-brand drug over a generic alternative when a public health program is the payor (Andrews, 2018). This statute does not, however, apply when the patient has commercial insurance.

Why?

Because government-funded health insurance programs were not created to make profits; they are created to ensure that patients are able to access healthcare services.

For-profit insurance companies argue that co-pay coupons and other types of financial assistance programs “undermine the actuarial structure of insurance plans,” forcing insurers to spend more on prescription medications than they “should” have to pay (Choi e al., 2024). By shifting costs back onto patients, insurers can continue to make profits, while patients can go bankrupt.

And this is the reality for many patients who rely on co-pay coupons and other forms of patient assistance. Most patients who rely on these forms of payment assistance are living with conditions that can be treated only with a limited number of medications, such as Hepatitis C, various types of arthritis, and other chronic conditions, most of which are exorbitantly priced. These patients are also the least able to afford treatment delays, as many of these conditions will worsen over time, crippling or potentially killing the patients (Chang, 2026).

In fact, the patients most likely to have chronic conditions are those least likely to afford it. The prevalence of chronic illnesses is higher in counties where levels of poverty are higher—particularly in the South and in Appalachia (Benavidez et al., 2024).

Co-pay accumulators are a craven attempt to accumulate profit off the backs of patients and manufacturers, and the sooner we implement federal laws banning their utilization, the better.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] AIDS Institute, The. (2026, February). Shortchanged: The Patient Impact of Copay Accumulator Policies in 2026. Tampa, FL: The AIDS Institute: Policy & Advocacy: Healthcare Access: Copays (National). https://theaidsinstitute.org/media/documents/02-27-2026-09-23-55-TAI_2026_Report_final.pdf

[2] Andrews, M. (2018, May 09). Why Can't Medicare Patients Use Drugmakers' Discount Coupons? Washington, DC: National Public Radio: Health Shots. https://www.npr.org/sections/health-shots/2018/05/09/609150868/why-cant-medicare-patients-use-drugmakers-discount-coupons

[3] Bevavidez, G. A., Zahnd, W. E., Hung, P., & Eberth, J. M. (2024, February 29). Chronic Disease Prevalence in the US: Sociodemographic and Geographic Variations by Zip Code Tabulation Area. Preventing Chronic Disease, 21, E14. http://dx.doi.org/10.5888/pcd21.230267

[4] Brooks, A. (2020, June 18). Copay Accumulator Programs: What Patients Should Know. Santa Monica, CA: GoodRx: Insurance: Health Insurance. https://www.goodrx.com/insurance/health-insurance/copay-accumulator-programs-cms-ruling

[5] Chang, D. (2026, July 07). Copay Assistance Is Meant To Defray Patient Drug Costs. Some Insurers Keep It Instead. San Francisco, CA: KFF Health News: Health Care Costs. https://kffhealthnews.org/health-care-costs/copay-accumulator-adjustment-programs-patient-assistance-insurance-pharma-drugs/

[6] Choi, D., Zuckerman, A. D., Gerzenshtein, S., Katsivalis, K. V., Nichols, P. J., Saknini, M. C., Schneider, M. P., Taylor, P., & Dusetzina, S. B. (2024). A primer on copay accumulators, copay maximizers, and alternative funding programs. Journal of Managed Care & Specialty Pharmacy, 30(8), 883-895. https://doi.org/10.18553/jmcp.2024.30.8.883

[7] Schmid, C. E., II. (2018, August 31). New Accumulator Adjustment Programs Threaten Chronically Ill Patients. Washington, DC: Health Affairs: Pharmaceuticals & Medical Technology: Forefront. https://www.healthaffairs.org/content/forefront/new-accumulator-adjustment-programs-threaten-chronically-ill-patients

The Opacity Behind the 340B-Eligible Hospital Transparency

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

What happens when one of the only ways a 340B Drug Pricing Program-eligible Covered Entity (CE) can be evaluated relies on a single line item on a federal tax form? This is one of the primary questions that 340B reform advocates must grapple with, and a point that 340B-eligible hospitals consistently rail against (American Hospital Association, 2025). The debate over what hospitals hide from consumers of healthcare services... patients... is a growing storm inside the Washington Beltway and across the nation.

At present, the Financial Assistance at Cost line item in Schedule H on federal Form 990 tax returns is the only way to measure how 340B-eligible hospitals use the revenues generated by 340B drug rebates (Figure 1).

Figure 1 – An Example of the Financial Assistance at Cost Line Item in Schedule H on the federal Form 990 Tax Return

Photo Source: ProPublica, 2026

In the example in Figure 1, Oroville Hospital, located in Oroville, CA, reported that, in tax year 2022, it provided $9,027,670 in healthcare services at no cost to patients, accounting for 2.28% of its $397,658,853 in annual revenue (ProPublica, 2026).

This is slightly above the national average of charity care provision of 2.2% in 2023 (Levinson et al., 2025) and higher than the charity care expenditures reported by 75 of the 98 hospitals (76.5%) whose 990s ADAP Advocacy has examined for its 340B Map, the average of which is just 0.93% of their annual revenues.

So, what does that mean?

Because there are virtually no public reporting requirements for most 340B CEs, determining how those CEs reinvest 340B-generated revenues in patient care is virtually impossible. This is incredibly problematic because, while there are statutory requirements that dictate the purpose of those revenues, the inability to ensure CEs are using those revenues properly means that a huge percentage of the revenues generated by nearly $200 billion in 340B-eligible drug purchases in 2025 are untraceable and may be misspent (IQVIA, 2026).

Hospitals argue that:

Charity care is only indicative of the amount of care provided to patients who qualify for the hospital’s financial assistance policy and is therefore provided to the patient free of cost. It does not account for costs that hospitals incurred for services where payment was expected but not received (bad debt) or payment shortfalls from public payers like Medicaid (underpayments). Therefore, it is more accurate to look at a hospital’s total uncompensated care (bad debt and charity care) and their total community benefits, which among other costs includes uncompensated care costs as well as payment shortfalls. 340B hospitals are providing high levels of uncompensated care and community benefits despite many of these hospitals operating on razor-thin margins (American Hospital Association, 2025).

Hospitals, the American Hospital Association argues, are being transparent about their expenditures through federal tax filings and public reporting by individual hospitals. Ask them to quantify exactly how 340B revenues are being spent, however, and they will tell you they’re not required to disclose that information.

In a June 18th Substack report from The Rojas Report, Dutch Rojas states that Yale New Haven Hospital spends just 0.69% of its total expenses on the provision of charity care. This information is gleaned from his examination of federal Form 990s for both Yale New Haven Hospital and Yale New Haven Health Services Corporation, the latter of which does not file a Schedule H. Rojas argues that:

In fiscal 2021, Yale New Haven Hospital spent 0.69 percent of its total expenses on charity care.

Read that again.

Not 6.9 percent.

Not even one percent.

Sixty-nine hundredths of a single percent.

This is an organization the Internal Revenue Service classifies as a charity. A 501(c)(3). Tax-exempt on the theory that it exists to serve a public so underserved that the rest of us agree to forgo the taxes it would otherwise owe. That is the deal. That is the entire justification for the exemption.

Now set the charity number against the size of the enterprise. Yale New Haven Health is Connecticut’s largest health system. It reported total operating revenue of $7.24 billion in fiscal 2024 and $7.58 billion in fiscal 2025. A charity does not operate at that scale. A Fortune 500 company does (Rojas, 2026).

Photo Source: The Rojas Report

Additional research led by Robert Popovian, visiting health policy fellow at the Pioneer Institute, currently awaiting peer review, has found that, among the 3,999 hospitals analyzed, 340B hospitals actually provided lower levels of charity care compared to non-340B hospitals (2.16% compared to 2.82%), with Critical Access Hospitals (CAH) providing the lowest average percentages of charity care (1.69%). These researchers conclude that participation in the 340B program does not consistently correlate with higher levels of charity care, suggesting a misalignment between the program’s intent and its outcomes (Popovian et al., 2026).

This aligns largely with what ADAP Advocacy has discovered over the course of its multi-year 340B Executive Compensation project. We examined the federal Form 990s of over 100 hospitals, looking at 990s dating to the year prior to each hospital’s admission to the 340B program, the year immediately after becoming a covered entity, five years after eligibility, ten years after, and the most recently available 990 at the time of research.

In our most recent supplemental report released in December 2025, we found that, across the 98 hospitals with examinable Schedule H filings, the provision of charity care as a percentage of annual revenues decreased by an average of 20.06% from the earliest Schedule H filing to the most recent. In fact, just 27 of those hospitals increased charity care provision, while 41 saw decreases of 50% or greater (Figure 2, Hopkins & Macsata, 2025).

Figure 2 - Largest Decreases in the Provision of Charity Care as a Percentage of Annual Revenue in Hospitals After Receiving Eligibility for the 340B Drug Rebate Program: Updated for 2025 Supplemental Report #2

Photo Source: ADAP Advocacy

Federal legislators are also expressing concern over the relative ungovernability of hospitals, particularly large hospital systems. In the current 119th Congress, Representative Gregory Murphy, M.D. (R-NC-03) introduced the Tax Exempt Hospital Transparency Act (H.R. 9504), which would require every tax-exempt hospital to include the following information in their annual tax filings:

• A description of how each organization is addressing the needs identified in the most recent community health needs assessment conducted under section 501(r)(3), and a description of any such needs that are not being addressed together with the reasons why such needs are not being addressed,
• The audited financial statements of such organization (or, in the case of an organization the financial statements of which are included in a consolidated financial statement with other organizations, such consolidated financial statement),
• The Centers for Medicare & Medicaid Services (CMS) certification number of the organization (or such other identifying information as the Secretary may require),
• The value, at cost, of the financial assistance provided during such taxable year pursuant to the organization’s financial assistance policy (as described in section 501(r)(4)), and
• The number of completed financial assistance applications received, granted, and denied during the taxable year pursuant to the organization’s financial assistance policy (as described in section 501(r)(4)).

Specific to the 340B Program, high revenue tax-exempt hospitals would have to report:

• (A) IN GENERAL.—For purposes of this subsection, the term ‘specified Federal 340B drug discount program information’ means—
• (i) the total number of individuals, by their type of insurance coverage, who were dispensed or administered covered outpatient drugs during the taxable year that were subject to an agreement under section 340B of the Public Health Service Act,
• (ii) the aggregate net 340B payment amount with respect to such drugs subject to such an agreement dispensed or administered by the organization during such taxable year, and
• (iii) the aggregate costs incurred by the organization during such taxable year that were necessary for such organization to participate in the program under such section and to comply with such program’s requirements (including program-related compliance, legal, educational, and administrative costs, and compensation paid to independent contractors to carry out program-related functions).
• (B) COVERED OUTPATIENT DRUG.—For purposes of this paragraph, the term ‘covered outpatient drug’ has the meaning given such term in section 340B(b) of the Public Health Service Act.
• (C) AGGREGATE NET 340B PAYMENT AMOUNT.—For purposes of this paragraph, the term ‘aggregate net 340B payment amount’ means, with respect to a covered outpatient drug purchased by an organization under an agreement under section 340B of the Public Health Service Act and dispensed or administered to an individual by such organization, the excess (if any) of—
• (i) the total amount of payments received from any payor by the organization for such drug, over
• (ii) the ceiling price (as described in subsection (a)(1) of such section) for such drug (or, if less, the price at which such organization acquired such drug) (H.R. 9504).

H.R. 9504 was passed by the House Committee on Ways and Means to the full House on July 1st, 2026, on a party-line voice vote (Republicans in favor; Democrats opposed). Democratic opposition to the bill largely centered on the addition of new administrative burdens placed on hospitals in the wake of over $1 trillion in cuts to healthcare programs in the One Big Beautiful Bill Act of 2025. The American Hospital Association, predictably, came out in opposition to the bill (McAuliff, 2026).

Photo Source: The New York Times

The reality is this:

Until such time as the public and legislators are able to examine how 340B drug rebate revenues are being utilized by covered entities, in general, and by hospitals specifically, accusations of malfeasance on the part of large health systems are going to continue, particularly with the growing threats posed to patients by private equity firms and managers (Hopkins, 2026).

In the meantime, unless hospitals voluntarily disclose how those 340B revenues are being reinvested, they’ll simply have to deal with their lack of charity serving as the primary metric by which they’re judged.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] American Hospital Association. (2025, October). Fact Sheet - 340B Drug Pricing Program: Fact vs. Fiction. Chicago, IL: American Hospital Association. https://www.aha.org/system/files/media/file/2025/10/fact-sheet-340b-drug-pricing-program-fact-vs-fiction-R.pdf

[2] Hopkins, M. J. & Macsata, B. M. (2025, December). The 340B Drug Rebate Program and its Potential Impacts on Annual Revenues, Executive Compensation, and Charity Care Provision in Eligible Covered Entities: Supplemental Report Two – December 2025. Washington, DC: ADAP Advocacy: Policy Center: 340B: Policy Papers. https://static1.squarespace.com/static/698f8fa09fc8884466a1becd/t/6a0b59ad218bcc00c30a3017/1779128749408/2025_ADAP_Project_RW_340B_Asset_30_ExecComp_Supplemental_Report_2_%2812.22.25%29.pdf

[3] Hopkins, M. J. (2026, June 18). The Growing Access Barrier Facing Patients: Private Equity. Washington, DC: ADAP Advocacy: Blog. https://adapadvocacyassociation.blogspot.com/2026/06/the-growing-access-barrier-facing.html

[4] IQVIA. (2026, June 04). The Size and Growth of the 340B Program in 2025. Durham, NC: IQVIA: United States: Library: White Papers. https://www.iqvia.com/locations/united-states/library/white-papers/the-size-and-growth-of-the-340b-program-in-2025

[5] Levinson, Z., Hulver, S., Godwin, J., & Neuman, T. (2025, February 19). Key Facts About Hospitals. San Francisco, CA: KFF: Health Costs. https://www.kff.org/health-costs/key-facts-about-hospitals/?entry=the-hospital-industry-number-of-hospitals

[6] McAuliff, M. (2026, July 01). Tax-exempt hospitals targeted in bill demanding more disclosure. Chicago, IL: Modern Healthcare: Politics & Regulation. https://www.modernhealthcare.com/politics-regulation/mh-house-tax-exempt-hospital-transparency-act/

[7] Popovian, R., Sydor, A. M., Czubaruk, K., Walker, M., & Smith, W. (2026, February 17). Financial Outcomes and Community Benefit in the 340B Program: Comparing 340B and Non-340B Hospitals. medRxiv. https://doi.org/10.64898/2026.02.12.26346191

[8] ProPublica. (2026). Full text of "Full Filing" for fiscal year ending Nov. 2023. New York, NY: ProPublica: Nonprofit Explorer: California: Oroville Hospital. https://projects.propublica.org/nonprofits/organizations/941634554/202402859349301695/full

[9] Rojas, D. (2026, June 18). Yale New Haven Spends 0.69% of Its Budget on Charity Care. Where the Rest Goes Is the Real Story. New York, NY: The Rojas Report. https://read.rojasreport.com/p/yale-new-haven-spends-069-of-its

[10] Tax Exempt Hospital Transparency Act, H.R. 9504, 119th Cong. (2026). https://www.congress.gov/bill/119th-congress/house-bill/9504

Extraction Dressed Up as Care: Why the 340B Program Needs to Answer to Patients

By: Ryan Alvey, Executive Director & Founder, Positive Change Movement, and member of the ADAP Advocacy 340B Patient Advisory Committee

The 340B Drug Pricing Program was created with a simple moral promise: to help safety-net providers stretch limited resources so vulnerable patients could get care, medication, and support. What happened to that promise?

Photo Source: ADAP Advocacy

As a person living with HIV in rural Kentucky, I know exactly what that promise is supposed to mean. It is supposed to mean that someone like me does not have to beg for care. It is supposed to mean that HIV service organizations exist for people living with HIV, not merely because of us. It is meant to mean that the money generated by our diagnoses, our prescriptions, our labs, and our lives comes back to the communities it was intended to serve. 

But too often, that is not what patients experience. 

I am not writing this as an outsider looking at a policy chart. I am writing this as a gay man living with HIV and numerous comorbidities who became an advocate because I had no choice. I have sat in rooms where people talk about ending the HIV epidemic while people living with HIV are missing from leadership. I have watched organizations build budgets, salaries, reputations, and public-relations campaigns around our suffering, while those most affected are treated as inconvenient whenever we ask questions.

And I have lived the consequences of a system where the provider holds all the power.

In rural communities, there may be only one HIV provider within reach. If that provider refuses  care, delays care, restricts access, or retaliates against a patient who speaks up, the patient does  not simply "go somewhere else." Somewhere else may require half a day of travel. Somewhere else may require transportation that the patient does not have or fuel that the patient cannot afford. Somewhere else may mean months without consistent care. Somewhere else may mean choosing between dignity and survival.

That is why 340B transparency is not an abstract policy issue. It is a patient safety issue.

The 340B Program is now enormous. IQVIA reported that in 2025, drug sales under the program topped $179.2 billion, which represented a year-over-year increase of 20% (IQVIA, 2026). The federal agency charged with policing the program describes it as a way for healthcare providers to “stretch scarce federal resources,” reach more eligible patients, and provide more comprehensive services.

That purpose matters. But purpose without accountability is just branding. 

An ADAP Advocacy report, "Is the 340B Drug Pricing Program the Next 'Too Big to Fail'?", asks the question many patients have been asking quietly for years: where are the savings going?  The report argues that 340B has grown without sufficient transparency and highlights an analysis of 102 providers in which annual revenues increased dramatically after joining 340B, CEO compensation rose, and hospital charity care declined.

Photo Source: ADAP Advocacy

This issue should concern everyone who cares about the future of HIV care. Charity care isn't just limited to hospitals; it's really about supporting people. The truth is, individuals with untreated, symptomatic HIV or advanced AIDS tend to use hospitals more often, facing higher admission rates and longer stays (NIH, 2018).

To be clear, 340B should not be destroyed or weakened. For HIV care, it can be essential. State AIDS Drug Assistance Programs (ADAPs) and Ryan White grantees depend heavily on drug rebates and savings to keep people insured, medicated, and...alive. The National Alliance of State and Territorial AIDS Directors (NASTAD) reported that in calendar year 2024, ADAPs achieved an 87% viral suppression rate among clients served, compared with an estimated 67% among all people living with diagnosed HIV in the United States.

That is exactly why reform matters.

When a program is this important, patients cannot afford blind trust. We cannot afford vague assurances that “the money helps the mission.” We need to know how. We need to know whether 340B revenue is paying for direct patient assistance, transportation, housing stabilization, peer navigation, rural access, mental health support, and culturally competent care — or whether it is being absorbed into executive salaries, expansion strategies, branding, buildings, and bureaucracy. 

People living with HIV should not have to file records requests, complaints, lawsuits, or whistleblower reports just to understand whether money intended to help us is actually reaching us.

Despite the Denver Principles, our community has been told for decades to trust institutions. Trust the nonprofit service provider. Trust the grant recipient. Trust the volunteer board. Trust the same systems that too often exclude the very people whose lives justify their funding.

I do not trust systems that refuse to be transparent.

Photo Source: ADAP Advocacy | iStock

If an HIV service organization receives funding from the Ryan White HIV/AIDS Program and benefits from 340B Program-related revenue, and claims to exist for people living with HIV, then it should be able to answer basic questions.

How much 340B revenue did it generate? How much was spent on direct patient assistance? How many patients received help with rent, utilities, transportation, food, insurance premiums, or emergency needs? How many people living with HIV serve on its board? How many people living with HIV hold paid leadership positions? How many complaints were filed by patients, applicants, employees, or community members? And how many of those complaints were independently investigated?

These questions are not attacks. They are the bare minimum.

The 340B Program's future cannot be decided only by hospitals, pharmaceutical companies, lobbyists,  providers, and trade associations. People living with HIV must be at the center of the conversation. Not as testimonials. Not as photos in annual reports. Not as an advisory board decoration. As decision-makers.  

Because we know what happens when accountability is optional.

We know what it feels like to be reduced to a funding category. We know what it feels like to see organizations praised publicly while patients go without help privately. We know what it feels like to be told that a program exists for us, only to be treated as a problem when we demand access, equity, and dignity.

The phrase “too big to fail” entered the public consciousness after the 2008 financial crisis, describing institutions so deeply embedded in the economy that their collapse could threaten the entire system. Julie Young’s definition of "too big to fail” is useful here because the 340B Program has become embedded in the healthcare financing system in much the same way: too large to ignore, too important to casually dismantle, and too dangerous to leave without accountability.

But Duncan Watts pushed the idea even further in the Harvard Business Review, asking whether some systems are not just “too big to fail” but “too big to exist” in their current form.  That is the question 340B now forces us to ask. Not whether the program should disappear, but whether a program this large should continue operating with so little transparency about where the savings actually go.

Photo Source: Third Way

Recent policy analysis from Third Way has also warned that hospitals can use 340B pricing advantages to increase revenue without ensuring patients receive the benefit.  That is exactly why patients should not be asked to accept vague promises. If providers are generating savings in the name of low-income, uninsured, underinsured, and chronically ill patients, then those patients deserve proof that the money is reaching them.

If the 340B Program is truly a safety-net program, then patients should be able to see the net. We should be able to touch it. We should know it will hold us when we fall.

Anything less is not safe. 

It is extraction dressed up as care.

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] Health Resources and Services Administration. (n.d.). 340B Drug Pricing Program. U.S. Department of Health & Human Services. Retrieved online at https://www.hrsa.gov/opa

[2] Health Resources and Services Administration. (2025, December 10). 2024 340B Covered Entity  Purchases. U.S. Department of Health & Human Services. Retrieved online at https://www.hrsa.gov/opa/updates/2024-340b coveredentity-purchases 

[3] Macsata, B.M., Anthony, G., & Hopkins, M.J. (2025, February). Is the 340B Drug  Pricing Program the Next “Too Big to Fail”? Washington, DC: ADAP Advocacy.  https://www.adapadvocacy.org/s/2025_ADAP_Project_RW_340B_Asset_16_Too_Big_To_Fail  _03-07-25.pdf 

[4] Martin, R., Karne, H., and Zeng, S. (2026, June 4). The Size and Growth of the 340B Program in 2025. IQVIA. Retrieved online at https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2026/iqvia-size--growth-of-340b-in-2025-white-paper-2026.pdf

[5] NASTAD. (2026). 2026 National Ryan White HIV/AIDS Program Part B ADAP Monitoring  Project Annual Report. Retrieved online at https://nastad.org/2026-rwhap-part-b adapmonitoring-report 

[6] Thune, J. (2024). SUSTAIN 340B Act Discussion Draft Explanatory Statement and Supplemental Request for Information. Bipartisan 340B Senate Working Group. Retrieved online at  https://www.thune.senate.gov/wp-content/uploads/media/doc/340B%20Discussion%20Draft%20Explanatory%20Document%20and%20Subsequent%20RFI.pdf 

[7] Rowell-Cunsolo TL, Liu J, Shen Y, Britton A, Larson E. The impact of HIV diagnosis on length of hospital stay in New York City, NY, USA. AIDS Care. 2018 May;30(5):591-595. doi: 10.1080/09540121.2018.1425362. Epub 2018 Jan 17. PMID: 29338331; PMCID: PMC5860957.

[8] Watts, D. (2009, June). Crisis Management – Too Big to Fail? How About Too Big to  Exist? Harvard Business Review. Retrieved online at https://hbr.org/2009/06/too-big-to-failhow about-too-big-to-exist 

[9] Wofford, David. (2025, February 12). How Hospitals are Raising Drug Prices. Third Way: Report. Retrieved online at https://www.thirdway.org/report/how-hospitals-are-raising-drug-prices 

[10] Young, Julie. (2023, November 13). Too Big to Fail: Definition, History, and Reforms. Investopedia: Terms. Retrieved online at https://www.investopedia.com/terms/t/too-big-tofail.asp