Rural Health Information Hub Latest News

340B savings on Five Popular Diabetes Drugs and Inhalers will Drop Significantly on July 1

Since the start of 2025, 340B providers have experienced reduced 340B savings on Januvia, Janumet, Janumet XR, Atrovent HFA and Spiriva Handihaler. 340B savings on these drugs will drop even further starting on July, 1, 2025. These reductions are the result of manufacturers’ decision to drop the Wholesale Acquisition Cost (WAC) for these drugs effective Jan. 1, 2025. Lower WAC prices lead to lower 340B savings, by causing:

  • Lower reimbursement from insurers, starting almost immediately (aka in January).
  • Higher 340B prices starting on July 1, when the new quarterly 340B discount (which lags six months behind changes in a drug’s WAC) will no longer include an “inflationary penalty.” Instead, the only discount will be the standard 340B discount of 23.1% for brand-name drugs.

This two-step reduction in 340B savings follows the same pattern that CHCs saw in 2024 with many diabetes drugs and inhalers, when a change in how state Medicaid rebates are calculated, led manufacturers to reduce WAC levels for many insulins and inhalers.

CMS Rescinds Guidance on Sexual Orientation and Gender Identity Questions for Medicaid and CHIP Applications

On June 5, CMS issued an informational bulletin (CIB) notifying states that it has rescinded a previous informational bulletin from Nov. 9, 2023. The rescinded CIB was titled Guidance on Adding Sexual Orientation and Gender Identity Questions to State Medicaid and CHIP Applications for Health Coverage. CMS stated that it no longer intends to collect this information as a part of T-MSIS data submissions.

Senate Confirms HHS Deputy Secretary Nominee

On June 5, the Senate confirmed former Silicon Valley executive Jim O’Neill as Deputy Secretary of HHS with a 52-43 vote. Previously, O’Neill worked under the George W. Bush Administration in various HHS roles and became principal associate deputy secretary of HHS. Upon his departure from the government, he served various roles in the biotechnology sector, most recently working as the CEO of a foundation focused on research into regenerative medicine solutions for age-related diseases. In his new role as Deputy Secretary, O’Neill will oversee daily operations of subagencies like the FDA and CMS and the development of federal health regulations.

‘One Big Beautiful Bill’ Would Batter Rural Hospital Finances, Researchers Say

Cuts to Medicaid and other federal health programs proposed in President Donald Trump’s budget plan would rapidly push more than 300 financially struggling rural hospitals toward a fiscal cliff, according to researchers who track the facilities’ finances.

The hospitals would be at a disproportionate risk of closure, service reductions, or ending inpatient care, according to a report authored by experts from the Cecil G. Sheps Center for Health Services Research following a request from Senate Democrats, who released the findings publicly Thursday. Many of those hospitals are in Kentucky, Louisiana, California, and Oklahoma, according to the analysis.

Trump’s budget plan, dubbed the “One Big Beautiful Bill Act,” contains nearly $800 billion in Medicaid cuts, according to the nonpartisan Congressional Budget Office. House Republicans passed the bill in late May, and it now awaits Senate consideration.

The proposed cuts to Medicaid raise the stakes for rural hospitals nationwide, many of which already operate on razor-thin, if not negative, margins. Diminished reimbursements from the state-federal health insurance program for those with low incomes or disabilities would further erode hospitals’ ability to stay open and maintain services for their communities — populations with more severe health needs than their urban counterparts.

“It’s very clear that Medicaid cuts will result in rural hospital closures,” said Alan Morgan, CEO of the National Rural Health Association, a nonprofit advocacy and research organization.

The Senate Democrats sent a letter to Trump, Senate Majority Leader John Thune, and House Speaker Mike Johnson asking them to reconsider the Medicaid cuts.

Sen. Edward Markey (D-Mass.), one of the Senate Democrats who requested the information from Sheps, in a statement said communities should know exactly what they stand to lose if Congress approves the reductions to Medicaid.

“People will die” if rural hospitals close, he said. “No life or job is worth a yes vote on this big billionaire bill.”

Read more.

PHAN Publishes Report on Vulnerable Hospitals in Pennsylvania

Some hospitals are operating on a razor-thin margin. Any disruption can lead to the elimination of services or complete closures. With declining Medicare reimbursement and cuts to Medicaid, uncompensated care will increase and budgets will not be sustainable.  Over the past 25 years, Pennsylvania has seen 78 closures or reductions in core services statewide, 26 of which were in rural counties. The Pennsylvania Health Access Network (PHAN) has identified eight criteria that describe a hospital’s likelihood to be impacted should cuts or changes to the Medicaid program occur.

View the report.

Medicaid Provisions Tracked in the House Bill

KFF is tracking health-related provisions of the 2025 Federal Budget Reconciliation Bill passed by the House, specific to Medicaid, the Affordable Care Act, Medicare, and Health Savings Accounts. The summary highlights sections of the House bill and compares changes to the current law. Of note, as it is currently drafted, the timeline for many of the provisions to take effect, if passed, would be enacted immediately, with others beginning as early as Jan. 1, 2026.