On March 3, 2026, the U.S. District Court for the District of Columbia held that a 2023 Health Resources and Services Administration (“HRSA”) Notice rolling back Covid-19 era flexibilities for 340B child site registration is unlawful.[1] This ruling is a significant win for 340B participating entities that utilize child sites, allowing concerns related to delays in registration to be mitigated.
Background
In 1994, HRSA provided guidance regarding the requirements for a 340B participating entity to obtain discounts at a child site. Prior to a child site being eligible for 340B pricing the site needed to (1) be a reimbursable site on the covered entities most recent Medicare Cost Report (MCR) and (2) be registered on the Office of Pharmacy Affairs Information System (“OPAIS”). A site could not be registered on OPAIS until it appeared on the MCR, and OPAIS registration is only open for two weeks at the start of each quarter, often leading to significant delays in these sites being eligible for 340B pricing.
During the 2020 COVID-19 pandemic, HRSA released guidance “waiving” the requirement that a child site to be listed on the MCR and be formally registered on OPAIS prior to being eligible for 340B pricing. The site was still expected to meet hospital provider-based requirements for off-site departments, but the flexibility was introduced to meet the needs of covered entities and patients during the public health emergency. Many believed this new standard should and would continue indefinitely.
However, on October 27, 2023, HRSA published a Notice announcing that it was ending the “waiver” period and reverting to its pre-pandemic registration policy (“Notice”). Child sites of covered entities could no longer immediately purchase or administer 340B drugs and the often months long registration process was again required.
The DC Court’s Opinion
Following the Notice, over 40 hospitals, health systems, and other medical facilities that participate in the 340B program challenged the guidance under the Administrative Procedure Act. U.S. District Judge Amit P. Mehta held on March 3, 2026, that the registration requirement is contrary to law. The requirement was found to lack justification in the text of the 340B statute. As a result of this finding, Judge Mehta vacated the 2023 Notice.
What’s Next
It is unclear at this time if HRSA will appeal this decision. However, for the time being, a child site that is sufficiently integrated into the covered entity is eligible to utilize 340B pricing prior to being on the covered entities MCR and prior to being registered on OPAIS.
We are here to help you navigate the new guidance. Please feel free to reach out with any questions.
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[1] Albany Med. Health Sys. v. Health Res. & Servs. Admin., Memorandum Opinion
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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