Medicaid loses billions as 340B program expansion collides with state budgets

The 340B Drug Pricing Program diverted $6.5 billion in rebates away from Medicaid in 2024, with state governments shouldering $2.3 billion of these losses, according to a July 2025 study by the Berkeley Research Group (BGR). This financial hemorrhaging stems from a fundamental design flaw where federal duplicate discount prohibitions create perverse incentives that simultaneously drain state healthcare budgets while enabling systematic exploitation of taxpayer-funded programs.

The study, commissioned by the Pharmaceutical Research and Manufacturers of America (PhRMA), represents the first comprehensive state-by-state analysis of how the 340B program's expansion into managed care environments undermines Medicaid's drug rebate collections. While the pharmaceutical industry's funding raises legitimate questions about methodology and framing, the underlying financial mechanics reveal a critical policy failure that demands immediate federal intervention.

The managed care loophole: How billions slip through regulatory gaps

The crux of the problem lies in the structural incompatibility between the 340B program's provider-based discount model and Medicaid's claims-based rebate system. Federal law prohibits manufacturers from providing both a 340B discount and a Medicaid rebate on the same drug unit—a sensible protection against duplicate discounts that becomes problematic when applied across different payment systems.

In fee-for-service Medicaid, this works as intended. Federal regulations under 42 CFR 447.512(b) require states to reimburse pharmacies at the actual acquisition cost, which is the discounted 340B price plus a dispensing fee. Lost rebate revenue gets offset by reduced reimbursement, maintaining fiscal neutrality.

Managed care environments tell a completely different story. The BRG analysis found that "managed care plans generally do not reduce reimbursement for 340B drugs—and in some cases are statutorily prohibited from doing so—the loss in rebate revenue from 340B expansion is not offset and drives up the net cost of prescription drug coverage for states and the federal government." Managed care organizations negotiate rates that typically exceed the discounted 340B price, with covered entities and contract pharmacies capturing the difference as revenue. At the same time, states forfeit manufacturer rebates without corresponding savings.

This distinction matters because managed care now dominates Medicaid delivery, covering approximately 72% of beneficiaries. The scale of this shift has transformed what was once a manageable tracking challenge in fee-for-service environments into a massive revenue diversion that states struggle to monitor, let alone prevent.

State-by-state devastation reveals policy choices and fiscal impact

The geographic distribution of losses illuminates how state policy decisions shape financial outcomes. Pennsylvania faces the steepest hit, with $634.8 million in total ineligible rebates, translating to a direct state budget impact of $265.3 million after accounting for federal matching funds. Illinois follows with a total of $544.3 million ($238.4 million state share), while Massachusetts sees a total of $433.5 million ($189.9 million state share).

These figures represent real money that could fund healthcare access, improve provider reimbursement, or provide budget relief for cash-strapped state programs. For context, Pennsylvania's $265 million loss exceeds the entire annual budget of many state health departments.

Notably, fifteen states appear as "N/A" in the analysis, indicating their Medicaid program structures prevent these specific costs. The BRG methodology "accounts for the 340B/Medicaid policies specific to each state," suggesting these states have implemented carve-out policies or other structural protections that eliminate managed care 340B dispensing to Medicaid beneficiaries.

California and New York exemplify this approach, having transitioned prescription drug coverage out of managed care partly due to 340B program costs. While these carve-outs protect rebate revenue, they require states to directly manage pharmaceutical benefits—a complex undertaking that smaller states may lack the resources to implement effectively.

Secondary market distortions compound direct fiscal harm

The BRG study acknowledges that rebate losses represent only part of the 340B program's broader impact on Medicaid spending. The analysis notes: "Our analysis does not account for other pathways through which the 340B program may be contributing to increased spending in Medicaid. The 340B program has been associated with a shift in care toward hospitals, for example—generally a higher-cost setting."

This observation aligns with research showing that 340B eligibility incentivizes provider consolidation and shifts in care settings. A 2018 Health Services Research study found that the 340B program has a significant impact on cancer care site selection and spending in Medicare, while a 2016 Milliman analysis documented how cost drivers shift across different care settings. When hospitals acquire physician practices or expand outpatient departments to capture 340B revenue, patient care migrates from lower-cost settings to higher-cost hospital environments. For Medicaid programs operating under global budgets or facing legislative pressure to control spending, these cost shifts compound the rebate revenue losses documented in the BRG analysis.

The study also references evidence that "340B covered entities tend to use more and/or more costly drugs for their patients, potentially because 340B drug margin (the difference between acquisition cost and reimbursement) is often greater for more expensive medicines." A 2015 Government Accountability Office (GAO) report found that financial incentives were used to prescribe 340B drugs at participating hospitals. A 2022 Milliman analysis of commercial outpatient drug spending at 340B hospitals and a 2025 Journal of Health Economics study on physician agency in 340B expansion document these utilization patterns. This dynamic creates perverse incentives where financial considerations may influence prescribing patterns, driving up both drug costs and Medicaid expenditures beyond the direct rebate losses.

Federal regulatory abdication enables systematic exploitation

The scope of revenue diversion revealed in the BRG study reflects broader failures in federal oversight and program integrity. A 2020 GAO report found that 25% of audited 340B programs had duplicate discount errors, with 264 of 429 cases caused by inaccuracies in the Medicaid Exclusion File system itself—the very mechanism supposed to prevent these problems.

More troubling, GAO found that only 4 of 13 covered entities had accurate descriptions of state Medicaid policies, suggesting systematic confusion about compliance requirements. When the federal oversight agency's own tracking system contains errors and covered entities lack a basic understanding of duplicate discount rules, billions in revenue diversions become inevitable.

The Centers for Medicare & Medicaid Services (CMS) "provides limited oversight of state Medicaid duplicate discount prevention efforts, leaving this responsibility to states, which are not always sufficiently funded or staffed to meet this responsibility," according to the BRG analysis. This abdication of federal responsibility creates a regulatory vacuum where systematic revenue diversions can occur without detection or accountability.

As we documented in our June 2025 analysis, CMS's refusal to mandate federal claims modifiers in its Medicare Drug Price Negotiation Program guidance exemplifies this regulatory failure. Claims modifiers represent existing, proven technology that could enable automated duplicate discount prevention, yet CMS has chosen to perpetuate complex, error-prone manual processes that enable continued exploitation.

Context of federal cuts amplifies the crisis

The timing of these revelations proves particularly concerning given broader federal policy changes affecting safety-net healthcare financing. As detailed in our July 2025 analysis of the One Big Beautiful Bill Act, proposed Medicaid cuts threaten to force 200,000 people living with HIV off coverage while simultaneously reducing Ryan White HIV/AIDS Program capacity to serve as a safety net.

When federal cuts increase provider dependence on 340B revenue precisely as that revenue diverts billions from state Medicaid programs, the result is a death spiral for safety-net financing. States lose revenue they need to maintain Medicaid access while providers chase 340B margins to replace vanishing federal funding. People living with HIV and other vulnerable populations get caught in the middle as both funding streams face pressure.

This dynamic transforms the 340B program from a targeted safety-net support into a massive wealth transfer from taxpayer-funded Medicaid programs to hospital systems and contract pharmacy networks. The BRG study's $6.5 billion figure likely represents a conservative estimate given the secondary spending effects and ongoing program expansion.

Immediate federal intervention required

Immediate federal action to implement mandatory claims identification systems and comprehensive program transparency is urgently needed. Claims modifiers represent proven technology already used in Medicare that could enable real-time duplicate discount prevention without disrupting legitimate 340B access for safety-net providers.

States cannot solve this problem unilaterally. The interstate nature of managed care organizations, the federal structure of both 340B and Medicaid programs, and the technical complexity of pharmaceutical supply chains require coordinated federal leadership. Every day of continued regulatory inaction enables millions more in revenue diversions while undermining both program integrity and taxpayer confidence.

The 340B program serves legitimate safety-net functions, but systematic exploitation of regulatory gaps threatens its long-term viability while imposing unsustainable costs on state budgets. Federal agencies must choose between meaningful reform that preserves legitimate access while preventing abuse, or continued abdication that enables billion-dollar revenue diversions until political pressure forces more drastic interventions. For the vulnerable populations depending on both 340B providers and Medicaid access, the stakes of this choice could not be higher.

The Coming HIV Care Crisis

The One Big Beautiful Bill Act (OBBBA)'s reduction of Medicaid expansion eligibility from 138% to 100% of the federal poverty level (FPL) creates an unprecedented crisis for HIV care in the United States, threatening to force approximately 200,000 people living with HIV off coverage while simultaneously undermining the Ryan White HIV/AIDS Program's capacity to serve as an adequate safety net, ultimately jeopardizing decades of progress toward ending the HIV epidemic and disproportionately harming communities of color and rural populations who already face significant barriers to care.

A Crisis at the Intersection of Policy and Survival

The One Big Beautiful Bill Act, signed into law on July 4, 2025, represents, according to the National Alliance of State and Territorial AIDS Directors (NASTAD), a moment when "AIDS Drug Assistance Programs (ADAPs) stand at a critical precipice." Let us not mince words: this legislation systematically dismantles the interconnected safety net that has enabled the United States to achieve the highest rates of viral suppression in the history of the epidemic.

The math, like those who passed this legislation, is cruel and unforgiving. With 40% of non-elderly adults living with HIV relying on Medicaid for coverage—nearly three times the rate of the general population—this eligibility reduction targets precisely the demographic most dependent on public health insurance. The Congressional Budget Office (CBO) projects that 7.8 million people will lose Medicaid coverage overall, with advocacy organizations estimating that approximately 200,000 people living with HIV will be among those stripped of coverage.

The timing creates a perfect storm. As NASTAD warns, "enhanced premium tax credits associated with Marketplace plans are set to expire later this year." At the same time, state health departments face "drastic budget cuts and reductions in force because of federal agency cuts." This convergence of federal policy changes threatens to create what NASTAD calls "sharp increases in the number of uninsured people with low incomes," precisely when the safety net programs designed to catch them are facing their own funding constraints.

The Medicaid Foundation: Why This Coverage Matters

The reduction from 138% to 100% of the federal poverty level specifically targets the income bracket where HIV prevalence is highest. Research demonstrates that 42% of Medicaid enrollees with HIV gained coverage through the Affordable Care Act's expansion, with this figure rising to 51% in expansion states. More than a mere statistical abstraction, it represents hundreds of thousands of people living with HIV (PLWH) who gained access to consistent, comprehensive healthcare for the first time.

The financial implications reveal the complexity of HIV care. Average Medicaid spending reaches $24,000 per HIV enrollee compared to $9,000 for non-HIV enrollees, reflecting the intensive medical management required for effective HIV treatment. When coverage disappears, these costs don't vanish—they shift to an already overwhelmed safety net or go unmet entirely, leading to treatment interruptions that increase viral loads and HIV transmission risk.

State-level analyses paint an even grimmer picture. Louisiana and Virginia face 21% spending cuts over the 10-year period, while Southern states that bear 52% of new HIV diagnoses despite comprising only 38% of the population will see disproportionate impacts. The legislation includes five major provisions that collectively cut $896 billion from Medicaid: work requirements, repealing Biden-era eligibility rules, provider tax restrictions, state-directed payment limits, and increased eligibility redeterminations.

The Ryan White Program: Last Resort, Impossible Math

The Ryan White HIV/AIDS Program operates on a fundamentally different model than Medicaid—one that makes absorbing massive coverage losses mathematically impossible. With $2.6 billion in discretionary funding requiring annual Congressional appropriations, the program lacks Medicaid's entitlement structure that automatically expands to meet growing needs.

The program's current client base reveals the scale of the challenge. Ryan White already serves over 576,000 clients annually, representing more than half of all diagnosed HIV cases. Critically, 39% of Ryan White clients have Medicaid as their primary payer, meaning they use Ryan White for wraparound services Medicaid doesn't cover. When these people lose Medicaid, Ryan White must suddenly cover their entire care costs—an impossibility given current funding constraints.

NASTAD's analysis warns this would "shift unsustainable burdens to the Ryan White HIV/AIDS Program," potentially forcing jurisdictions to reintroduce AIDS Drug Assistance Program (ADAP) waitlists not seen since the early 2010s. The program's "payer of last resort" status means it legally must serve anyone without other coverage options, creating an unfunded mandate when Medicaid disappears.

Historical evidence demonstrates the program's existing capacity limitations. From 2017-2019, 58.7% of uninsured persons had unmet needs for HIV ancillary care services, yet the program achieved 90.6% viral suppression rates among clients in 2023—a testament to its effectiveness when adequately resourced.

The proposed FY 2026 budget compounds this crisis by cutting Ryan White funding to $2.5 billion while eliminating Part F entirely. Part F includes AIDS Education and Training Centers that reached 56,383 health professionals last year, representing a critical workforce development component that would disappear precisely when demand for HIV care is expected to surge.

Healthcare Infrastructure Under Siege

Federally Qualified Health Centers (FQHC), serving as the backbone of HIV care in underserved communities, face an existential crisis. With Medicaid comprising 43% of FQHC revenue, the reconciliation bill threatens the fundamental business model of these safety-net providers. FQHCs currently operate on razor-thin margins approaching negative 2.2%, with 42% reporting 90 days or less cash on hand.

The rural healthcare crisis intensifies these challenges. Over 700 rural hospitals face closure risk—representing one-third of all rural hospitals—with 171 having shut down since 2005. The bill's $25 billion rural transformation fund provides only 43% of what experts calculate is needed to offset Medicaid cuts.

For HIV care, this means losing critical access points in areas already designated as priority jurisdictions for the Ending the HIV Epidemic (EHE) initiative. Research demonstrates that FQHCs in the rural South could reduce median drive time to HIV care from 50 to 10 minutes—but only if they remain financially viable. When Medicaid patients lose coverage, FQHCs must still serve them as uninsured patients by law, creating additional uncompensated care costs the facilities cannot absorb.

The 340B Program: Hidden Financial Hemorrhaging

The removal of Pharmacy Benefit Manager (PBM) spread pricing prohibitions represents a significant blow to 340B savings that HIV programs depend on for sustainability. The 340B program generated $38 billion in discounts in 2020 alone, with Ryan White clinics using these savings to serve an additional 43,000 people living with HIV.

Without spread pricing protections, PBMs can continue diverting these savings through discriminatory practices. States have documented massive overcharges: Ohio lost $224.8 million in one year, Pennsylvania $605 million over four years, and Maryland $72 million annually to spread pricing schemes. For HIV programs already operating on minimal margins, these losses represent the difference between serving patients, implementing waitlists, or shutting down altogether.

The policy intersection becomes particularly cruel when considering substance use services. While the OBBBA protects substance use disorder services from cost-sharing requirements—a "modest but important win" according to county officials—the broader context undermines these protections. Research shows 23.94% of people with HIV need treatment for alcohol or substance use, with people who inject drugs facing 30 times higher HIV risk than non-users.

Geographic and Demographic Devastation

The reconciliation bill's impacts fall hardest on communities already bearing disproportionate HIV burdens. Black and Hispanic/Latino people account for 64% of all people with HIV while representing only 31% of the population. These communities have higher Medicaid coverage rates due to lower incomes and higher disability rates, making them particularly vulnerable to coverage losses.

Southern states face a catastrophic combination of high HIV prevalence, limited state resources, and political resistance to mitigation strategies. The region accounts for 52% of new diagnoses, and includes many non-expansion states where 66% of HIV-positive adults rely on disability-related Medicaid pathways.

Nine states have trigger laws automatically ending Medicaid expansion if federal matching rates drop, creating immediate coverage cliffs. The intersection of geography, race, and poverty creates concentrated zones where HIV care infrastructure may collapse entirely, reversing decades of progress in communities that have historically faced the greatest barriers to care.

Clearly, This Isn’t About Fiscal Responsibility

The legislation represents fiscal malpractice when considering the long-term costs of new HIV transmissions. Each new HIV infection creates $501,000 in lifetime healthcare costs, while achieving 72% viral suppression would cost $120 billion over 20 years. The math is unambiguous: preventing new infections through sustained treatment is far more cost-effective than treating them after they occur.

The HIV community's response demonstrates the severity of the threat. Over 113 organizations relaunched the #SaveHIVFunding campaign, while the Partnership to End HIV, STI, and Hepatitis Epidemics united major organizations in opposition, emphasizing that "healthcare is not a reward for paperwork—it is a human right."

As NASTAD's analysis concludes, "When one of these pillars weakens, the others feel the shock waves"—and this bill doesn't just weaken pillars, it demolishes them. Without immediate action to reverse these cuts, the United States will witness a preventable reversal of decades of progress in HIV care, measured not in budget savings but in lives lost to a disease we know how to treat.

RFK Jr.’s Administration for a Healthy America is Not Healthy

RFK Jr.’s paradigm for reimagining the pathway to improve population health in the United States includes the creation of what he calls the Administration for a Healthy America (AHA). He has issued a mandate to solve chronic disease issues that he views as essential. Implementation of the AHA would consolidate many existing agencies and lines of funding to increase efficiency. However, there is no benefit to consolidation if it means stripping away resources, including finances and personnel, without fiscal reinvestment and infrastructure replacement.

The AHA absorbs multiple entities under one umbrella. Agencies such as the Substance Abuse and Mental Health Services Administration (SAMHSA), Health Resources and Services Administration (HRSA), the Office of the Assistant Secretary for Health (OASH), and the National Institute of Environmental Health Sciences (NIEHS) would cease to exist and their functions would be absorbed into the new AHA entity. While there is some benefit to government reorganization and streamlining of funding and communication silos, the pathway set by AHA appears to eliminate the benefits of the current entities in favor of a nebulous description of chronic disease prevention.

RFK Jr. champions the fight against the causes of chronic disease across the nation. However, the specifics of his foci do not logically follow data. Approximately six out of 10 Americans live with one chronic disease, while four in ten have two or more. While extolling the virtues of eradicating chronic disease, actions by the U.S. Department of Health & Human Services (HHS)would abolish the Centers for Disease Control & Prevention’s (CDC) National Center for Chronic Disease Prevention and Health Promotion in its present form. In budget documents, AHA is referred to as “the primary federal agency committed to transforming the health of all Americans by addressing the root causes of chronic disease, promoting preventive care, advancing mental health and substance use services, and increasing access to a healthy environment and foods.” Yet the priorities of what are being viewed as pertinent chronic disease issues are what concern many stakeholders.

Kennedy continues to push the narrative that too much money and focus is spent on infectious disease inquiry at the expense of chronic diseases. However, the data show that this is not true. Receiving $8.1 billion, infectious diseases landed at ninth on the list of NIH-funded research subjects in 2024. Comparatively, brain disorders received $8.1 billion, and Cancer received almost the same as the entirety of infectious diseases. One cannot reallocate a resource focus from infectious disease to chronic disease because it is not a matter of one being more important than the other.

Infectious diseases and chronic diseases are inextricably linked to each other. Limiting infectious disease research would exacerbate chronic disease states, as communicable diseases play a crucial role in their development. For example, ongoing research suggests infections from things like herpes, syphilis, and pneumonia contribute to the development of neurological issues like Alzheimer’s. Moreover, HIV research has been integral in the advancement of treatments and understanding of chronic diseases. HIV research has led to a deeper understanding of the immune system. Knowledge concerning how the body identifies and targets infected cells is derived from HIV research. Lentiviruses function in a similar way to HIV, which led scientists to use lentiviruses in gene therapy to treat maladies such as blood cancers. The infectious Epstein-Barr virus has been associated with lymphoma, lupus, and multiple sclerosis.

Dismantling the current infrastructure to consolidate and reform under the AHA umbrella may be a setback because knowledgeable staff with valuable expertise and networks have already been laid off through reductions in force (RIFs). Recreating effective teams does not happen overnight and cannot be reconstituted with RFK Jr’s proposed reductions in funding. Additionally, chronic disease research, assessment, and prevention require analysis of data acquired through proper surveillance. Jerome Adams, surgeon general during Trump’s first administration, is quoted as stating, “Surveillance capabilities are crucial for identifying emerging health issues, directing resources efficiently, and evaluating the effectiveness of existing policies…Without robust data and surveillance systems, we cannot accurately assess whether we are truly making America healthier.”

The AHA agenda aims to investigate the “true” root causes of chronic diseases. However, a dearth of quality research already exists. Additionally, factors like obesity and environmental exposure have been proven to be causal factors of chronic disease. However, those issues have etiologies related to conditions such as socioeconomic status. Unfortunately, JFK Jr and the Trump Administration have described research in health disparities and health equity as lacking scientific merit and purpose. This is unfortunate when research of this nature is effective. A study that investigated disproportionate levels of mortality from COVID-19 among minorities resulted in improved efforts that led to a reduction of the racial gaps in vaccination rates, saving lives.

RFK Jr. has done nothing to generate trust in his vision or demonstrate the ability to make sound public health decisions. He recently released a health commission report on children’s chronic issues that was touted as gold-standard science. Instead, experts have proven many of the studies referenced in the report were mischaracterized, were of dubious merit, some having touted messaging that has already been debunked by evidence-based science, and seven studies referenced were fraudulent, having been complete fabrications. This behavior is further complicated by Kennedy's description of established peer-reviewed medical journals, such as The Lancet and the New England Journal, as corrupt. As an alternative, he expressed the possibility of creating government-run journals.

Divesting from infectious disease control and prevention will assuredly increase our chronic illness burden. Focusing efforts on chronic disease topics that are not significant factors in the most pressing public health needs diverts discourse and resources from issues that truly matter, ultimately harming the population. As JFK Jr.’s budgetary plans continue to develop, it is imperative to continually ask questions that shine a light on the opaque nature of his messaging and desired implementation.

Equal Health Policy is Queer Liberation

The month of June is recognized globally as Pride Month for the LGBTQ+ community. Set in motion at Stonewall and in my home of Kansas City where organizers of the movement met in 1966. It is a time to recognize those who have come before us, the progress we have made, and the continued commitment to live and love freely, authentically, and visibility.

The fight for equality has never been without its legislative setbacks, The Defense of Marriage Act, Don’t Ask, Don't Tell, and California’s Proposition 8. In recent years, a disturbing trend has emerged across the United States and beyond: a wave of legislation that directly targets the LGBTQ+ community—particularly transgender individuals—under the guise of public health, education, or religious freedom. While often framed as matters of morality or parental rights, these laws have very real and dangerous consequences for the health and well-being of our communities. The political weaponization of identity not only marginalizes communities but creates systemic barriers to healthcare access, exacerbating existing disparities such as houselessness, substance misuse, and mental health. 

“In an era where queer lives are being legislated out of public existence and public health is being gutted for political theater, allyship means more than rainbow logos—it means resistance. It means leveraging your voice, your access, and your platforms to push back loudly, not later.” - Travis Manint, Director of Communication Community Access National Network

The Legislative Landscape: An Escalating Crisis

From bills banning gender-affirming care for youth, anti-DEI initiatives, and restricting LGBTQ-inclusive education, to efforts allowing providers to deny care based on religious beliefs, the legal attacks on LGBTQ health are mounting. In 2024 alone, hundreds of anti-LGBTQ bills were introduced across state legislatures—many of them passing into law.

Additionally, the suggestion of any cuts to HIV funding, including prevention, takes many back  to times in our history when the Regan administration turned their backs on our community, and allowed an entire generation to be wiped out, citing moral panic as a reason to deny federal funding.  

These measures are not benign. When transgender youth are denied access to hormone therapy or counseling, their mental health suffers, and a community more likely to consider suicide When schools are forbidden from discussing LGBTQ topics, students lose access to information that affirms their identities. And when healthcare providers can legally refuse to treat LGBTQ patients, trust in the healthcare system erodes. Each policy sends the wrong message: you do not belong, and you are not safe here.

The Health Consequences of Discrimination

LGBTQ youth experience houselessness at a rate far higher than their peers, with some studies indicating they are 120% more likely to experience it. While only 7% of the overall youth population identifies as LGBTQ, they comprise up to 40% of homeless youth. This disparity is particularly pronounced for transgender and nonbinary youth, with some research suggesting they experience houselessness at even higher rates. Houselessness is not limited to LGBTQIA+ youth, Sexual minority adults are twice as likely as the general population to have experienced homelessness in their lifetime. 

Substance misuse is highly prevalent among LGBTQ+ persons, data on the rates of substance abuse in gay and transgender populations are sparse, it is estimated that between 20 percent to 30 percent of gay and transgender people abuse substances, compared to about 9 percent of the general population, yet affirming treatment centers for our community continue to be scarce. In 2021, over half of LGBTQ youth (56%) used alcohol in the last year, including 47% of LGBTQ youth under the age of 21. Over one in three LGBTQ youth (34%) used marijuana in the last year, including 29% of LGBTQ youth under the age of 21. One in 10 (11%) LGBTQ youth reported having used a prescription drug that was not prescribed to them in the last year, and this rate was the same for those under and over the age of 21. The stress that comes from daily battles with discrimination and stigma is a principle driver of these higher rates of substance use, as gay and transgender people turn to tobacco, alcohol, and other substances as a way to cope with these challenges.

Research has consistently shown that LGBTQ individuals face disproportionately high rates of mental health conditions, substance use, and chronic illness—not because of their identities, but because of the stigma and discrimination they face. According to the CDC, LGBTQ youth are more than four times as likely to attempt suicide compared to their non-LGBTQ peers. Transgender individuals face elevated risks of depression, anxiety, and suicidal ideation, especially when denied gender-affirming care. According to the Trevor Project 39% of LGBTQ+ young people seriously considered attempting suicide in the past year — including 46% of transgender and nonbinary young people.  

Policy plays a pivotal role in either perpetuating or addressing these health disparities. Restrictive laws not only block access to care but foster environments of fear, alienation, and trauma. Conversely, affirming policies—such as nondiscrimination protections, inclusive data collection, and funding for LGBTQ+-specific services—create pathways to health equity.

LGBTQ+ Health Must Be a Policy Priority

Healthcare policy should be a tool for protection, not persecution. We must hold legislators accountable when they propose or support bills that endanger LGBTQ+ lives under the guise of “protecting children” or “religious liberty.” At the same time, we must uplift and support policies that affirm identity, improve access, and invest in LGBTQ+ health. Prioritizing LGBTQ+ health is not a matter of inclusion—it’s a matter of survival. Our laws should reflect the values of dignity, equity, and compassion. 

In an environment where our very existence is being attacked in legislative sessions, it is time we draw from our history, become voices, not victims, and for our allies to stay engaged. It is our turn to make history, demanding better of our lawmakers. Because at the end of the day affirming, culturally competent, equitable LGBTQ+ healthcare is Queer liberation.

Strengthening Caregiving Infrastructure is Fundamental to a Healthy American Society

John’s Hopkins defines a caregiver as a person who tends to the needs or concerns of a person with short- or long-term limitations due to illness, injury, or disability. On June 24, 2025, PBS will air a documentary on the multifaceted landscape of caregiving executive produced by Bradley Cooper and narrated by Uzo Aduba. The documentary explores the history of various aspects of caregiving in the United States, with a focus on the lived experiences of care providers, particularly family caregivers who provide care in the home. The documentary is timely, given how caregiver support could be affected by the present-day potential changes to Medicaid and other healthcare funding changes. The caregiving continuum spans from birth to the end of life, yet the caregiving infrastructure in the United States is insufficient.

Caregiving in the United States is both paid and unpaid, provided by professionals and laypeople. Caregiving encompasses a wide range of services, including daycare, preschools, in-home care, nursing homes, and more. Notably, according to 2020 data from AARP, around 53 million Americans give unpaid care in the home. This level of effort is by necessity, not by choice. Paying for private care services is prohibitively expensive, and loved ones prefer those in need to be in the surroundings of their own homes, living through long-term health challenges, as opposed to institutions. Home surroundings are especially desired regarding end-of-life issues.

The current U.S. healthcare infrastructure is not sufficient to meet the needs of caregivers and those they care for. Nursing homes are where some individuals with long-term significant care needs find themselves because they don’t have any family to take care of them or their family is ill-equipped to meet their needs. While Medicaid will pay 100 percent of the costs of nursing homes, the logistics of the coverage is problematic.

Medicaid coverage of nursing home care requires specific financial and health conditional requirements. In general, the financial eligibility criteria mean that a person in need must have very little in assets. If a patient does not qualify for Medicaid financially, they essentially have to spend down all their assets until they reach the required level of poverty. Additionally, in some states, the state will go after possession of a patient’s home if there is a home in their name at the end of their life. It’s referred to as Medicaid estate recovery, where a lien is placed on the home to recover some of the funds spent on long-term institutional care.

This is damaging, as it undermines the home's ability to remain in the family as a means of generational wealth. Moreover, if relatives are living in the house, they lose their place of domicile. Medicare, on the other hand, does not pay for any long-term care, such as nursing homes. Medicare will only pay for short-term care, documented medically necessary care in skilled nursing facilities such as rehabilitation homes after someone has been inpatient in a hospital. Patients who have significant care needs but do not require a level of care demanding enough to meet Medicaid criteria or do not qualify for Medicaid financially have to be cared for at home.

Having been a multi-year primary caregiver of my mother, who dealt with multiple healthcare issues, I understand first-hand the demands of being an at-home caregiver. I was not trained to be a caregiver. I was unaware of resources available to help me care for her, nor were hospitals or outpatient clinics any significant help in navigating her increasing needs from year to year. When it got to the point where she couldn’t walk, feed herself, get out of bed to relieve herself, bathe, or groom, the responsibility fell upon me as her only child.

I had to navigate taking care of all of her physical and medical needs while trying to financially support myself and attempt to flesh out a modicum of normalcy in my life. Although I was fortunate to work from home, it was challenging to balance my demanding data analysis position with her care needs. It was painful to hear her calling out for me while I was in the middle of a meeting or presentation, whether those I was interfacing with could hear her or not. I was not concerned if someone heard her faintly from down the hall during virtual meetings. It was painful because I always let her know when I had meetings scheduled so I could take care of her needs preemptively before the events. Thus, hearing her call out for me meant that it was a serious, urgent need, knowing that she always felt like she was being a burden and tried not to disturb me unless she urgently needed to.

Her financial situation did not qualify her for Medicaid, especially given her retirement and social security benefits. She had Medicare, which was partially paid for through her employer as part of her retirement benefits. While Medicare paid for her medications, it did not cover care needs related to day-to-day living. Medicare would not pay for a nurse or trained care individual to come in daily or several times a week to give her a proper bath once she could no longer bathe herself, thoroughly make sure her private areas were cleaned adequately after bodily functions, make sure all her bodily skin folds were powdered and dressed, and so much more. For example, I knew that any time she relieved herself of solid waste while bedridden, that meant one to two hours of time it would take me to properly get her taken care of as she couldn’t help me move her body to tend to her needs.

After I talked in depth with her primary care doctor, Medicare agreed to pay for a basic home hospital bed that allowed me to raise her up to make her comfortable and raise her legs when necessary. Medicare paid for a lower extremity lymphedema pump air compression recovery boot system for her swollen legs that sometimes developed sores, which I had to dress and clean. She was overweight, in addition to being unable to mobilize herself. Thus, after petitioning a doctor who attended to her after one of many inpatient stays, Medicare paid to rent a Hoyer lift so that I was able to lift her to change the bed or help put her on stretchers at times I had to call EMS. Although Medicare paid for renting these items after many rounds of begging and discussions, they would not pay for someone to come in and help me utilize the tools.

I had to learn how to use them on my own. The only time Medicare paid for anyone to come into the home was when some of her leg wounds and bed sores exacerbated to the point of justifying once-a-week home health visits to take care of them. Most importantly, those visits were only temporary. Once they had healed to the point where she was evaluated as not requiring weekly paid care, the visits stopped. I had to learn the involved processes from the home health nurses and how to administer care on my own. They would even order extra supplies to send to our home so that Medicare would cover them, rather than my mother and I having to buy them ourselves.

The aforementioned is only a small part of the realities of being an at-home caregiver. However, it is a window into the kind of support that caregivers and patients need. There need to be payment innovations that provide funding for things like home care beyond temporary skilled nursing needs. When patients with significant needs are discharged back into their homes after inpatient stays, there needs to be robust networks of after-discharge support that include inquiring about the needs of caregivers and those they care for.

Chronic condition care often requires numerous durable medical goods and disposable medical products that Medicare and private insurance do not cover. A system that helped caregivers with some of the financial burden of those needs would prevent families from financial ruin. For example, since my mother was bedridden, she obtained a device called a Pure Wick system that was a means to relieve urination without the complications of skin breakdown from wetting adult diapers. We had to pay out of pocket for the single-use catheters used for the device, which cost $150 per month in addition to all of the other many care products used on a daily basis.

There are many reasons why people end up in a long-term home care situation. There needs to be infrastructure in place at the local level to fill the gaps and meet needs financially, emotionally, and physically. Presently, a company like Trualta has the right idea. It is an online platform that provides caregivers with access to various training, support, and a way to interact with other caregivers.

However, vast improvements in government infrastructure are needed to effectively remedy home health care needs. The current potential detrimental changes to Medicaid and Medicare present an exacerbation of the status quo instead of a solution. Only 10 states have any means of compensation for family caregivers, and just 13 have paid family and medical leave. Caregiving is not a private issue to be lived through in darkness and silence. Ensuring a robust and stable caregiving continuum from birth until the end of life is the only way to ensure an economically stable and medically healthy society.

CMS Draft Guidance Creates Regulatory Vacuum in 340B Drug Pricing

The Centers for Medicare and Medicaid Services (CMS) released its draft guidance for the Medicare Drug Price Negotiation Program in May 2025, offering operational improvements like using Wholesale Acquisition Cost (WAC) for standardized refund calculations. Yet beneath these technical refinements lies a critical policy failure: CMS's refusal to mandate federal claims modifiers for affected transactions and contradictory programs. This decision creates a regulatory vacuum that enables systematic duplicate discounts worth billions annually while sidelining patient experiences.

By abdicating responsibility for duplicate discount prevention and suggesting retrospective payment models that could strain smaller entities, CMS has created an environment where unscrupulous actors can exploit loopholes as state laws increasingly block the transparency mechanisms needed for program integrity. The contrast is stark—CMS requires mandatory "TB" modifiers for Part B inflation rebates but makes them voluntary for Maximum Fair Price (MFP) effectuation, creating an inconsistent regulatory framework that undermines program integrity.

"CMS had an easy answer right in front of them," says Jen Laws, CEO of the Community Access National Network (CANN). "Claims modifiers are an already existing tool within the scope of Medicare claims and instead agency officials opted to offer more than 220 pages worth of justifying why they won't mandate the information and not one page was dedicated to appreciating how such a fragmented approach might harm patients. The only mention we got was off handed references about maybe listening to patient advocacy organizations - which didn't go so well for us during the initial listening sessions of drug selection. Honestly, it's all entirely baffling."

The Mechanics of Duplicate Discounts and Why Modifiers Matter

Without clear claims identification, the same drug unit may receive multiple discounts—340B pricing plus Medicare rebates or Medicaid rebates—creating billions in inappropriate financial flows. Federal law (42 USC 256b(a)(5)(A)(i)) explicitly prohibits duplicate discounts between 340B and Medicaid rebates on the same drug unit, yet enforcement remains weak. While this might seem fine, no specified benefit is required to flow to patients and these factors incentivize ever increasing, uncontrolled costs within the healthcare ecosystem.

The scope of this problem is staggering. IQVIA estimates $20-25 billion in duplicate discounts annually across the industry. A Government Accountability Office (GAO) audit found that 25% of audited 340B programs had duplicate discount errors, with 264 of 429 cases caused by inaccuracies in the Medicaid Exclusion File system (MEF) itself. For context, some states seeking to prohibit claims modifier requirements cite use of the MEF—these inaccuracies and resulting duplicate discounts highlight the flaws of this approach.

The exploitation extends beyond duplicate discounts. Contract pharmacy fees extract over $1 billion annually from the 340B ecosystem, with CVS's third-party administrator (TPA) operation alone collecting over $350 million in fees over a few years according to Senate HELP Committee inquiry.

"Statutorily prohibited duplicate discounts are one of the many ways the 340B program is exploited as a profit-making tool by large hospital systems and for-profit contract pharmacies," explains Kalvin Pugh, State 340B Policy Director at CANN. "A simple claims modifier would ensure that this guidance prevented continued abuse and taken a step forward in much-needed accountability."

Despite misleading statements to the contrary, claims modifiers do not risk patient privacy. Claims modifiers function as digital markers using de-identified information to tag individual claims as 340B, similar to Medicare claims, enabling automated systems to exclude them from other rebate calculations. Without this technical infrastructure, PBMs can attempt "illicit rebate grabs" on 340B drugs, and covered entities can divert Medicaid rebates that should be reinvested in state programs directly to their own entities. These exploitations drive up the overall cost of medication and care for patients, either directly by profiteering off of patients and not passing on those discounts or by way of increased private insurance premiums as justified by increased billing across the healthcare ecosystem.

State Medicaid Programs Bear the Cost of Federal Inaction

The absence of mandatory claims modifiers enables duplicate discounts that drain state Medicaid rebate programs of billions annually, forcing difficult choices between expanding access and protecting limited state resources. While the pending Reconciliation Bill making its way through the Senate includes provisions to prohibit 340B spread pricing in Medicaid programs—as was seen in the December 2024 Continuing Resolution prior to it being gutted—efficient and effective compliance requires a claims modifier.

A Health Management Associates study found that 9 states position that manufacturers should seek recoupment from providers rather than reducing state rebate payments. The Texas experience illustrates the real-world consequences—when the Texas Legislature considered legislation that would have expanded 340B contract pharmacy use without oversight or revenue-sharing requirements, the fiscal note projected the state's HIV Medication Program would become 'insolvent by 2027' with an estimated $72 million shortfall over a multiyear period. This demonstrates how policy changes affecting 340B identification can directly threaten state programs serving vulnerable populations, while some states implemented comprehensive carve-out policies removing all 340B drugs from managed care to avoid such complications entirely.

"State programs will lose out on numerous rebates by offering the option to use the often lower 340B discount instead of the Medicaid price," Pugh explains. "This will strain state resources and put vulnerable impoverished communities at risk of losing access to lifesaving healthcare and medications."

In non-fee-for-service states, choosing the 340B rate over the Medicaid rate diverts rebate value away from Medicaid program reinvestment, effectively divesting from state programs that serve vulnerable populations. This interaction between 340B and Medicaid creates perverse incentives that undermine both programs' effectiveness.

CMS's Abdication of Responsibility Creates a Regulatory Vacuum

By declaring it "will not, at this time, assume responsibility for deduplicating discounts", CMS has created a regulatory vacuum that enables bad actors while burdening manufacturers and providers with piecemeal solutions.

The consequences of this abdication are far-reaching. At least 12 states have enacted laws restricting 340B claims modifier requirements or data sharing. CMS provides limited oversight of state Medicaid duplicate discount prevention efforts, leaving this responsibility to states, which are not always sufficiently funded or staffed to meet this responsibility. The Indiana situation exemplifies this chaos—former state officials filed a "whistleblower" lawsuit alleging "tens, likely hundreds" of millions of dollars of Medicaid fraud by hospital systems and managed care entities (PBMs by any other name), partly due to inadequate state oversight.

According to insights from interviews with former and current Medicaid directors and pharmaceutical policy experts in 14 states, the Health Resources and Services Administration (HRSA) has been faulted with inconsistent and weak enforcement of 340B duplicate discounts due to lack of data transparency. The GAO review found that only 4 of 13 covered entities had accurate descriptions of state Medicaid policies.

"While CMS might be about to assume some of HRSA's responsibilities with regard to 340B, it seems the agency is prepared to repeat HRSA's abdication of responsibility," Laws notes. "The IRA's interaction with 340B under this draft guidance systematizes the absolute headache covered entities, manufacturers, and patients already have with one program and just...duplicates it."

Retrospective Payment Models Threaten Safety-Net Provider Viability

The shift from prospective 340B discounts to retrospective payment models could create existential cash flow threats for smaller safety-net providers who lack working capital to absorb payment delays. While the draft guidance offers a rubric for manufacturers to assess entity financial sustainability and requires manufacturers to enact individualized action plans, this approach is clumsy and not foolproof, nor does the guidance suggest how smaller entities might efficiently comply with a patchwork of manufacturer assessment tools.

The financial reality for true safety-net providers is bleak. Nearly 45% of rural hospitals operate with negative margins, making 340B savings vital for maintaining operations. 93% of rural hospitals report relying on 340B savings to help keep their doors open. However, rural hospitals average only $2.2 million in annual 340B savings, compared to $11.8 million for all hospitals. Compliance costs range from $100,000 to $200,000 annually, regardless of hospital size, posing a significant burden on these facilities.

The timing requirements compound these challenges. The 14-day MFP payment window plus manufacturer 45-day lookback requirements create complex compliance deadlines that smaller entities may struggle to meet.

CMS also fails to contemplate the natural and expected outcome of confusing and potentially conflicting billing for patients. People already face challenges determining actual payments due when engaging in critical care for chronic and complex health conditions. Bills may come slow or arrive with differing amounts due based upon claims adjudication. A complex retrospective payment process as suggested by CMS will only further exacerbate this issue.

Technical Infrastructure: Why Modifiers Are the Solution

Claims modifiers represent proven, existing technical infrastructure that could solve the identification problem with minimal additional burden on providers already using similar systems. Think of claims modifiers as digital tags—simple two-digit codes that healthcare providers already add to insurance claims to provide additional information about services without changing the fundamental billing process. The "TB" modifier became the universal 340B identifier for all covered entities when billing Medicare Part B starting January 1, 2025.

The key point is that this infrastructure already exists for Medicare—extending similar requirements to the Medicare Drug Price Negotiation Program would simply apply proven technology consistently across federal programs rather than creating new systems. Furthermore, False Claims Act liability creates potential fines up to $10,000 per incorrect Medicare entry, ensuring accuracy and proper use of these digital markers.

The Path Forward Requires Federal Leadership

The public comment period for CMS's draft guidance closes on June 26, 2025, representing a critical opportunity for stakeholders to advocate for mandatory modifiers.

"We had some high hopes for a more thoughtful and, frankly, direct approach to our already fractured healthcare system with this guidance," Laws reflects. "The draft, as it is, is a mess. Mandating a claims modifier is a direct and elegant answer that would require far less wasted ink. Despite this Administration's claims to the contrary, here we are watching draft guidance unfold that will perpetuate a system prone to fraud and abuse. And patients? Our experiences in the middle of all of this? We're an afterthought. It's just completely unacceptable. The only way systems meet patient needs is by starting with us. This is not that and CANN is prepared to be loud and clear about that fact."

A mandatory federal claims modifier can provide the systematic solution needed to protect safety-net providers and ensure program integrity. Technical fixes aren't enough—comprehensive policy reform is needed. The stakes are too high, and the patients we serve deserve better than regulatory half-measures that enable exploitation while threatening the safety net they depend on for survival.

Leaked HHS Budget: Critical HIV Services Face Deep Cuts

A recently leaked budget document from the Department of Health and Human Services (HHS) has revealed the Trump Administration's plans for sweeping cuts that would fundamentally reshape federal health programs. The 64-page "pre-decisional" budget proposal, first reported by The Washington Post, outlines a severe reduction in HHS discretionary spending from $121 billion to approximately $80 billion—a 33% cut. This proposal provides the first comprehensive look at the administration's vision for restructuring the nation's health infrastructure, including the creation of a new Administration for a Healthy America (AHA) while eliminating or consolidating many established agencies that form the backbone of our public health system. The proposed changes would profoundly impact HIV/AIDS programs, viral hepatitis services, substance use disorder treatment, and access to care for vulnerable populations, potentially reversing decades of progress in public health.

The Scale of Proposed Cuts

The magnitude of cuts outlined in the leaked budget document would fundamentally transform the federal health infrastructure in ways not seen in decades. The National Institutes of Health (NIH), America's premier biomedical research institution, would see its budget slashed by 42%—from $47 billion to just $27 billion. This dramatic reduction would be accompanied by a plan to reorganize NIH's 27 institutes and centers into just eight, eliminating some entirely while consolidating others into broader entities with less specialized focus.

Similarly devastating, the Centers for Disease Control and Prevention (CDC) faces a proposed 44% budget reduction, from $9.2 billion to approximately $5.2 billion. The document indicates the CDC would be refocused primarily on "emerging and infectious disease surveillance, outbreak investigations, preparedness and response, and maintaining the Nation's public health infrastructure."

Even more concerning, several agencies would be eliminated entirely as independent entities, including the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Administration for Strategic Preparedness and Response (ASPR), and the Administration for Community Living (ACL). While some programs from these agencies would transfer to the proposed Administration for a Healthy America (AHA), many would be eliminated outright. As the leaked document itself states: "Many difficult decisions were necessary to reach the funding level provided in this passback."

Impact on HIV/AIDS Infrastructure

The proposed budget would effectively dismantle decades of federal HIV prevention and treatment infrastructure, threatening to reverse significant progress made toward ending the epidemic. Most alarming is the complete elimination of the CDC's Division of HIV Prevention (DHP), which has been the cornerstone of the nation's HIV prevention efforts. According to POZ, the division passes 89% of its funding directly to state and local HIV programs, with states like Alabama and Mississippi depending on it for up to 100% of their HIV prevention efforts.

The budget also eliminates the Ending the HIV Epidemic (EHE) initiative, which was launched during Trump's first administration and has produced a 21% reduction in new HIV transmissions within targeted jurisdictions. This initiative represented a rare bipartisan commitment to addressing the HIV epidemic through increased testing, prevention, and treatment resources.

The Ryan White HIV/AIDS Program, which provides essential care and treatment to over 550,000 people living with HIV who are uninsured or underinsured, would see significant cuts. The KFF analysis reveals that while core funding for grants to cities, states, and the AIDS Drug Assistance Program (ADAP) would be maintained, the budget eliminates support for dental services, AIDS Education and Training Centers, and demonstration programs.

Additionally, the Minority AIDS Initiative, which addresses the disproportionate impact of HIV on racial and ethnic minorities, would be eliminated entirely. This comes at a time when Black and Latino communities continue to face disproportionate HIV rates and could worsen existing health disparities.

"The scale of what is being lost is staggering," POZ reports. "According to recent analysis from amfAR, a 100% reduction in DHP funding will lead to 143,486 new HIV infections by 2030, 14,676 additional AIDS related deaths, and $60.3 billion in additional lifetime health care costs."

The proposal would move remaining HIV/AIDS programs under the new Administration for a Healthy America with reduced funding and an unclear structure, raising serious questions about program coordination and effectiveness going forward.

Viral Hepatitis, STIs, and Related Programs

The leaked budget proposal takes aim at viral hepatitis, sexually transmitted infections (STIs), and tuberculosis programs by consolidating their funding into a single, smaller grant program. According to POZ, "a proposal in the new budget to turn other CDC funding for viral hepatitis, STDs, and TB into block grants masks devastating funding losses as 'flexibility to address local needs.'" In reality, this consolidation would reduce overall funding by approximately $500 million, severely limiting the capacity to prevent and respond to outbreaks of these conditions.

Particularly concerning is the elimination of CDC's Global Health Center and the agency's critical STD laboratory, which MedPage Today confirms was shuttered during the recent mass layoffs. These cuts would dismantle essential testing infrastructure at a time when sexually transmitted infections are at record highs nationwide. The consolidation approach significantly weakens the specialized responses needed for these distinct but interconnected public health challenges, potentially allowing localized outbreaks to develop into broader public health crises without the targeted interventions currently in place.

Mental Health and Substance Use Disorder Services

The proposed budget calls for the complete elimination of the Substance Abuse and Mental Health Services Administration (SAMHSA), the federal agency dedicated to addressing mental health and substance use conditions. The impact of this elimination would be compounded by severe cuts to services: Mental Health Services would see a 25% reduction, Substance Use Treatment funding would drop by approximately 13%, and most alarmingly, Substance Use Prevention would be nearly eliminated with a staggering 92% cut.

The proposal would eliminate 17 mental health programs and 23 substance use prevention and treatment programs. Harm reduction services, which are critical in preventing overdose deaths and the transmission of infectious diseases such as hepatitis C virus (HCV), are particularly targeted for cuts. The proposed budget would also end the Certified Community Behavioral Health Clinic program, which provides 24-hour crisis services regardless of patients' ability to pay.

As STAT News reports, "We continue to face a mental health and addictions crisis, and the need for effective federal leadership is more important than ever." These cuts come at a time when more than one in four people will experience a mental health or substance use problem, and over 209,000 Americans die annually from alcohol, suicide, and drug overdoses.

Rural Health and Access to Care

Rural communities would bear a disproportionate burden from the proposed budget cuts through the elimination of numerous programs specifically designed to support rural healthcare infrastructure. As detailed in the leaked document, the budget would eliminate State Offices of Rural Health, which coordinate statewide efforts to improve healthcare delivery in rural areas. The Washington Post reports that rural hospital flexibility grants, rural residency development programs, and at-risk rural hospitals program grants would all face elimination or significant cuts.

Additionally, critical telehealth funding would be eliminated at a time when remote healthcare services have become essential lifelines for rural populations. These programs have historically enjoyed strong bipartisan support due to their critical role in maintaining healthcare access for the approximately 60 million Americans living in rural areas.

Alan Morgan, CEO of the National Rural Health Association said, "Those are essential to ensuring access to care for rural Americans and critical to keeping rural hospitals open. If that would come to fruition it would be absolute shocking news, because these programs have had such bipartisan support."

The Advisory Board notes that these cuts would exacerbate the already fragile state of rural healthcare, where over 150 rural hospitals have closed since 2010, leaving many communities without access to emergency and essential medical services.

340B Program and Healthcare Costs

Amid the sweeping cuts to safety-net programs, the leaked budget also proposes significant changes to the 340B Drug Pricing Program, which provides discounted medications to hospitals and clinics serving vulnerable populations. HFES reports that the administration is "seeking new authority to regulate 'all aspects of the 340B Program'" and would require covered entities to report on their use of 340B savings.

According to Health Exec, the proposal would require facilities to "charge no more than the actual cost of acquiring and dispensing drugs to low-income patients." While greater transparency might be beneficial, these changes—combined with cuts to other safety-net programs—could restrict access to affordable medications for people living with HIV, hepatitis, and other chronic conditions who rely on safety-net providers participating in the 340B program.

Conclusion

Unlike during Trump's first term when Congress often rejected deep cuts to health agencies, the current political landscape offers much less hope for meaningful congressional pushback. Under the GOP-controlled Congress, recent reports show Republicans largely falling in line behind Trump's initiatives, with Reuters reporting that the president is "testing the U.S. Constitution's system of checks and balances" while congressional Republicans demonstrate "staunch support." This legislative acquiescence has extended to health policy, with little effective opposition to the administration's sweeping restructuring of federal health agencies.

Further complicating advocacy efforts, HHS Secretary Robert F. Kennedy Jr. has eliminated a key avenue for public input by rescinding a 54-year-old policy that required public comment periods for rules on grants, benefits, and other health programs. This change, which came despite Kennedy's promises of "radical transparency," allows HHS to implement major policy changes without seeking feedback from affected communities, healthcare providers, or advocacy organizations.

In this environment, traditional advocacy approaches must evolve. In the absence of congressional intervention, our energy may be better spent:

1. Forming coalitions between patient groups, healthcare providers, private business, and public health organizations to amplify impact

2. Considering support for legal challenges to health policy changes implemented without adequate review

3. Carefully documenting and publicizing the real-world impacts of cuts to HIV services and other critical programs

4. Engaging with state officials who may have flexibility in implementing federal changes

5. Making use of remaining public comment opportunities when available, with a focus on evidence-based arguments

The proposed dismantling of federal HIV infrastructure represents an existential threat to decades of progress. While the political headwinds are strong, our collective advocacy efforts remain essential to protecting the health services that millions of Americans depend on.

States Push PDABs Despite Warning Signs, Patient Concerns

The debate over how the U.S. tackles rising healthcare costs is as constant as the sun setting in east. Most Americans feel the financial pressures from the high cost of their healthcare, evidenced by individual households holding 27% of the nation’s $4.3 trillion health-related expenditure burden. Healthcare spending is fragmented and multifaceted, being comprised of expenses such as hospitals, residential and personal care facilities, medical providers, technology, and retail prescription drugs. Despite the complexities of the healthcare market, pharmaceutical expenditures are often the most simple target to attack, often accompanied by solutions that seem way too good to be true. The fact is, access to prescription drugs is a significant part of modern medicine but there is nothing simple about how prescription drugs are brought to market and sold to consumers. In 2022, $633.5 billion was spent in the U.S. on prescription drugs, yet overall prescription drug expenditures by the government, private insurers, and patients were less than $1 out of every $7 spent on healthcare.

In recent history, in an attempt to create a “simple” solution to the costs John and Jane Q. Public pay for prescription drugs, through legislation, several states have created PDABs. PDABs are Prescription Drug Affordability Boards, also called Prescription Drug Advisory Boards. In theory, a board created to lower the cost of drugs for patients sounds like a good thing. However, the manner in which PDABs are currently set to operate is more harmful than good. Patients are not included in the development of the PDABs' decisions when those decisions directly affect their lives.

That is why the Community Access National Network (CANN) entered this policy and advocacy space. The boards have the wrong focus and don’t have patients’ interests as the priority. There is a difference between access and affordability. Jen Laws, C.E.O. of CANN, states, “Ultimately, CANN's focus is 'access' - it's in our name. Cheap gimmicks often pose serious potential to disrupt access for patients because we're the interest group here with the least in the way of resources (time, money, manpower). It's why we do what we do, and it's why we're going to keep doing what we do."

The prevalent tool PDABs utilize to lower costs is Upper Price Limits, or UPLs. The myopic focus is the allowable maximum a plan might reimburse a pharmacy or provider for any particular medication. However, this focus is not on lowering the price of what patients pay. A UPL does not determine what drug manufacturers charge for their drugs. It only sets the maximum that insurance plans will reimburse for drugs. That does not directly benefit patients because there is no mandate to pass any “savings” back to patients, for plans to retain medications with lower reimbursements, or for patients to have lower cost-sharing related to these medications. In general, patients pay for medications through co-pays and patient assistance programs. Although UPLs lower drug prices for payors, they increase the price patients potentially pay in terms of access by threatening the financial stability of providers and pharmacies, incentivizing utilization management that prioritize certain medications over others (regardless of an individual patient’s needs), and disrupt the provider-patient relationship by inserting the interests of payors over that of patients.

CANN has created multifaceted resources to educate the public about PDABs, their challenges, and possible solutions. People engage and comprehend in different ways. As such, CANN created varied communications. Long-form blog posts were written to be detailed sources of education and advocacy. A white paper was created as a downloadable handout to empower patients and enable them to engage with local PDABs or legislatures that are considering them in states that do not have them yet. For visual learners, CANN created an animated video that gives an overview of PDABs and their challenges, which is digestible and easily shareable.

With UPLs, the price patients potentially pay by losing access is more damaging than the monetary price tag of a drug a payor considers. UPLs that are set too low can cause drug manufacturers to reduce the production of drugs or place drug purchasing groups in the position of discounting distribution to a particular state altogether if low reimbursement makes them too costly to sell in that state. No purchaser or re-seller can sell to a state at a cost. No pharmacy can distribute a medication that costs them more to provide than they get paid in return. This creates shortages or removal of life-saving medications from the market, resulting in delays in care or patients being forced to utilize medicines that aren’t as efficacious as they and their physicians’ desired prescriptions.

UPLs also damage patient access by adversely affecting the 340B Drug Pricing Program entities that use the revenues from discounts to provide medications and other healthcare services to vulnerable populations without recourse for care. Lower revenues mean fewer services and possibly closures of facilities or program restrictions. AIDS Drugs Assistance Programs are largely dependent on using their 340B savings to extend access to care to poorest people living with HIV. We’re already seeing providers discuss this concern relative to insulin price caps. In a recent 340B Report article, the issue is summed up as follows: “Before 2024, most insulins had list prices of $300-$500 or more and were 340B penny-priced, so 340B providers earned savings of $300-$500 per prescription, Meiman said. However, now that many insulin list prices are $35, the 340B savings could drop to around $8 per prescription, she said. Historically, 340B savings on insulin have accounted for around 10% of community health system 340B revenue, she said.” Colle Meiman, a national policy advisor for the State & Regional Associations of Community Health Centers, also acknowledged this problem is a bit “counterintuitive” to how most policymakers think about drug pricing and reimbursements.

Moreover, lowering the price insurers are allowed to pay for medications is a double-edged sword. While on the surface, it seems like it would save payors money, it potentially only benefits PBMs in the short term and is an additional barrier to patient access. PBMs make their money from the profits they get via drug rebate revenues. Low UPLs will result in drug manufacturers lowering rebate levels and therefore lowering how much PBM’s might make on a particular medication. This means that PBMs could potentially increase the occurrence of benefit designs that restrict drug formularies to steer towards medications that result in more profit, not what is best for patients’ health. This already happens and is a concern many providers are beginning to voice. Additionally, they could enforce more utilization management, which again is a barrier to access but a way to increase their profitability.

CANN is energized to shine the light on PDABs and offer better solutions. Jen Laws explains, "Instead of nonsensical quick fixes, which aren't fixes to anything other than next quarter profits for payors, legislators should be focused on addressing the self-dealing nature of 'vertical integration', shoring up incentives for innovation, and meaningfully fixing benefit design that currently disadvantages patient access." Instead of a PDAB, states should consider a board focused on the patient perspective to evaluate benefit plan designs and offer recommendations to each state legislature about policy actions that will benefit patients as the priority stakeholder group.

In partnership with HealthHIV and The AIDS Institute, CANN will continue this work. It's crucial to stay abreast of the inner workings of policy and to advocate for the public proactively. Digging into the weeds with a patient focus enables advocacy groups to sound the alarm to the public as well as take the patient's perspective to those in power. Those in power are detached from the humanity behind the dollars and cents on their financial ledgers.

Special Interests Favor S.4395, but Patients Oppose It...Here's Why

This blog post is a collaborative piece, co-written by Brandon M. Macsata, CEO of ADAP Advocacy Association, and Jen Laws, CEO of Community Access National Network.

The very first words of the Ryan White HIV/AIDS Treatment Extension Act of 2009 read, “An Act to amend title XXVI of the Public Health Service Act to revise and extend the program for providing life-saving care for those with HIV/AIDS.” These words reflect the true legislative intent of the Act, which is to provide life-saving care and treatment for people with HIV/AIDS (PLWHA). For over thirty years, these words have represented a contract between our government and PLWHA, reflecting a commitment to patients. The Ryan White HIV/AIDS Program (RWHAP), as the payor of last resort, has literally served as the only lifeline for hundreds of thousands of patients in some of the most marginalized communities. That is why the ADAP Advocacy Association and the Community Access National Network (CANN) have led a national advocacy campaign to thwart any effort to undermine the legislative intent.

A proposed bill, S.4395 (otherwise known as the "Ryan White PrEP Availability Act"), would, for the first time in the 32-year history of this life-saving contract, open the Act to divert programmatic funding from PLWHA to people who are not living with HIV. The legislation is not only ill-conceived, it is potentially very dangerous. The special interests behind this legislation, as well as their inside-the-beltway lobbying tactics, do not reflect the general sense of the much broader HIV patient advocacy community. 

In fact, nearly 100 national, state, and local organizations joined the ADAP Advocacy Association and Community Access National Network in submitting a sign-on letter to Congress expressing the HIV patient advocacy community's collective concerns over the legislation. The sign-on letter was sent to Chair and Ranking Member of the Senate Committee on Health, Education, Labor & Pensions (HELP), Chair and Ranking Member of the House Committee on Energy & Commerce (E&C), and the Co-Chairs of the Congressional HIV/AIDS Caucus. Several of these offices applauded our efforts upon acknowledging receipt of the letter.

David Pable, who has been deeply embedded in South Carolina's patient advocacy community, expressed strong sentiments against the legislation. Pable said, "For almost 20 years, Ryan White has been a lifeline for me, and it was truly the safety net that saved my life. Ryan White-funded medical care, case management, and mental healthcare services have transform my life and the lives of countless others to survive and thrive." Pable's views are shared by nearly all PLWHA who learn about the potential danger lurking behind S.4395.

Over the years, Pable had the opportunity to be involved in many planning meetings for prevention services, including the need for an adequate PrEP program with dedicated funding. According to Pable, never in any of those meetings was it discussed as a good idea to funnel funding from the Ryan White Program to pay for PrEP. "Treatment, care and prevention make up three sides of the triangle," he said. "Together they each hold up the other, but take one piece away to support the other and eventually it will all fall apart." 

S.4395 would authorize the Health Resources & Services Administration (HRSA) to divert already limited resources away from providing care and treatment for PLWHA. The legislation reads, in part, "Any eligible area, State, or public or private nonprofit entity that receives a grant under part A, B, C, or D may use program income received from such a grant to provide to individuals who are at risk of acquiring HIV... drugs and biological products for pre-exposure prophylaxis (PrEP)... medical, laboratory, and counseling services related to such drugs and biological products...and referrals and linkages to appropriate services for the prevention of HIV."

The legislation is extremely ill-advised for numerous reasons. Amending the Ryan White Program (Pub.L. 101-381) would:

• Open-up the law, (which is currently unauthorized) and thus subject it to potentially harmful changes in a hyper-partisan political environment.

• Change the purpose of the law, in that the purpose of the Ryan White Program is serving people living with HIV/AIDS.

• Create yet another access barrier for the approximately 400,000 PLWHA who are not in care.

• Further isolate PLWHA who are already disproportionally impacted by homelessness, hunger, substance use disorder, and undiagnosed and/or untreated mental health conditions.

• Impede Ending the HIV Epidemic's efforts to both increase enrollment and expand services for low-income PLWHA, especially since discretionary funding is already limited.

Unfortunately, special interests continue to push false narratives in their efforts to shove the harmful legislation through the Congress. Probably one of the most egregious claims, “The bill’s intent and text doesn’t take money from people living with HIV.” This is false! 

Indeed, legislative language reads, “To allow grantees under the HIV Health Care Services Program to allocate a portion of such funding for services to individuals at risk of acquiring HIV.” While subsection “B” of the legislation entitles the program as “voluntary” and to not allow federal grant dollars for the use of funding PrEP or PrEP services, it would allow federal grant dollars to be used for referrals – explicitly providing funding for people not living with HIV.

Photo Source: oncnursingnews.com

More concerning, special interests supporting the legislation conflate programmatic revenue as not grant dollars, as a somehow meaningful distinction. There is no difference in this distinction because each funded RWHAP recipient and subrecipient is required under current law to use their programmatic revenue to support providing services included in the grant – for people living with HIV. The design of these programs are significantly dependent on revenues generated from the 340B Drug Discount Program (340B) in order to meet the goals outlined in each of the grants. 

And that gets to the heart of the issue here. 340B's intent was “to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” The program, amid much criticism, allows federal grants funding public health programs count on 340B revenues in order to show they can operate a sustainable program.

Let's be clear: S.4395 would divert RWHAP programmatic revenues – including 340B dollars – away from providing services and supports to PLWHA who are living at or below 400% of the federal poverty level (the income threshold for qualifying as eligible for receiving RWHAP funded services). It is important to remember that more than 50% of the patients receiving care from the State AIDS Drug Assistance Program are living at or below 100% of the federal poverty level. More than 250,000 patients, or approximately one quarter of all the estimated people living with HIV in the United States are earning less than $13,000 per year. 

Kathie Hiers, President & CEO of AIDS Alabama argued, "The HIV community needs to get its act together around funding for PrEP.  We have been told by the Director of the Office of National AIDS Policy that our messaging is not cohesive. At AIDS Alabama, we understand that stable PrEP programs are absolutely necessary if we ever hope to end HIV as an epidemic. However, raiding the Ryan White Program to fund prevention is not the answer, particularly as the needs of an aging HIV-positive population continue to grow."

As it stands, gaps in care still remain for too many marginalized communities. It isn't uncommon for patients to fall out of care because they have to prioritize work, or child care, or buying food, or finding affordable housing, or finding transportation. Funding to meet the needs for these patients is already stretched way too thin and the current inflationary pressures have only made things harder for far too many PLWHA. There are tens of thousands of people living with HIV who have no roof over their heads when they try to find a safe spot to sleep tonight.

Photo Source: debralmorrison.com

Robbing Peter to pay Paul is not the solution to funding HIV prevention efforts in the United States. A better option to meet the needs of people who would benefit from PrEP, and that is additional HIV prevention funding. This approach would allow patient choice in medicines and support for ancillary services, provider education and outreach. Additionally, HIV prevention funding could be directed to communities that are most in need of prevention medicines and services, thereby providing more equitable access. This approach would also use and could strengthen the existing HIV prevention infrastructure.

One local health department official (who asked to remain anonymous) in Florida said the people behind the legislation did not understand the nuances between funding for HIV prevention and HIV treatment. We couldn't agree more!

The HIV+Hepatitis Policy Institute's Carl Schmid summarized, "It's not an issue of not wanting clinics that receive Ryan White Program funding to be engaged in PrEP, we think they are the perfect places for PrEP to be delivered. It is an issue of taking funding generated from caring and treating for people living with HIV away from the intended purpose of the Ryan White Program – to provide for people living with HIV. With so many people with HIV living longer, who are not in care or have fallen out of care, you would think that these Ryan White grantees would devote that money to people who are living with HIV, as it was intended."

With more than a decade of science to back the position that effectively treating PLWHA, ensuring viral suppression both empowers positive health outcomes for PLWHA and prevents new transmissions. One of the most startling and, frankly, concerning shifts in the public policy conversation regarding Ending the [domestic] HIV Epidemic is a move away from focusing on the needs of PLWHA in favor of PrEP. The policy issues at hand, including the necessary funding, should not be proposed as an “either/or” situation, but an “and” situation. The same things that make a person vulnerable to contracting HIV are the same things that are killing people already living with HIV. 

While the U.S. Centers for Disease Control and Prevention (CDC) 2020 Surveillance data found 70% of white PLWHA were virally suppressed, only 60% of their Black/African American peers were virally suppressed. Additionally, while the U.S. Department of Housing and Urban Development (HUD) reported a general homelessness rate across the country as about 0.2% of the population, the CDC’s 2019 data found that PLWHA among communities of color were experiencing homelessness at a rate of 11%. It cannot be understated how the power RWHAP dollars hold to address these disparities specifically affecting patients. Failing to do so not only betrays the contract at the center of the legislative intent, it perpetuates injustices levied against our peers, our family, and our community. Raiding precious dollars from this program is nothing short of consenting to the unjust neglect of our communities.

Said Murray Penner, U.S. Executive Director for Prevention Access Campaign: "The Ryan White Program is crucial for people living with HIV, providing treatment and supportive services to keep people healthy and undetectable so they will not sexually transmit HIV. With over 400,000 people living with HIV in the U.S. who are not virally suppressed, there is significant unmet need for additional services. S.4395 would move money out of the Ryan White Program, potentially leaving people without the crucial treatment and services that keep them healthy and prevent new transmissions. Ensuring that the Ryan White Program is fully funded is critical for us to improve the quality of life for people living with HIV and thus improve our country's viral suppression rate and help us end the HIV epidemic."

A cornerstone of the HIV patient advocacy community's success over the last 40 years has been its desire to come together for a common purpose, which has centered around the notion of do no harm! S.4395 and the special interests and inside-the-beltway lobbyists pushing it have failed to meet that test. Raiding Ryan White programmatic funding for PrEP would negatively impact patients. Trying to authorize or amend an already underfunded program, when there is still so much unmet need in its originally intended population, undermines the goals of the program. If we try to be everything to everyone, we will end up failing on all fronts. The powers that be in Congress have assured us that this legislation "ain't going anywhere" this year!