On March 3, 2026, the U.S. District Court for the District of Columbia overturned the Health Resources & Services Administration’s (HRSA) 340B registration requirement for off-site outpatient facilities of covered hospitals (known as “child sites”).1 For covered entity hospitals, the ruling reduces financial exposure by eliminating delays in providing cost-effective care in these settings.
What Are 340B Child Site Registration Requirements?
Since 1994, HRSA had required child sites to appear as reimbursable on the hospital’s Medicare cost report and be registered and listed in the Office of Pharmacy Affairs Information System (OPAIS) before administering or purchasing 340B drugs. During the COVID‑19 pandemic, HRSA temporarily waived its longstanding requirement, allowing new child sites to use 340B drugs immediately upon opening as long as patients met the 340B patient definition.
In October 2023—well after the public health emergency ended—HRSA formally announced it was ending the waiver and reinstating the pre‑pandemic registration rules, prompting more than 40 hospitals and health systems to sue. They argued under the Administrative Procedure Act that HRSA’s return to the 1994 policy was contrary to law, imposed an unauthorized eligibility requirement, and harmed hospitals by forcing them to purchase expensive, non‑340B drugs for new sites during lengthy registration delays.
What Did the Federal Court Decide in March 2026?
In its ruling, the U.S. District Court for the District of Columbia held that HRSA’s registration requirement for child sites is unlawful because it imposes an eligibility condition that does not appear in the 340B statute. After analyzing the statutory text, the court concluded that Congress established only three eligibility “requirements” for covered entities and gave the Department of Health and Human Services no authority to add new prerequisites, such as cost report listing or HRSA certification.
The court emphasized that Congress knew how to require agency certification when it wished to and chose not to impose such a requirement for hospitals. Because HRSA lacks rulemaking authority for the 340B program, it also cannot create substantive conditions via guidance. Accordingly, the court granted summary judgment to the plaintiffs, vacated HRSA’s 2023 Notice, and declared HRSA’s child site registration requirement unlawful.
What Does the Ruling Mean for 340B Hospitals?
For hospitals that participate in 340B, this ruling eliminates the need for child sites to wait months for cost report inclusion and HRSA approval before using 340B drugs. Hospitals can treat patients at newly opened off‑site facilities using 340B‑priced drugs as soon as those sites otherwise qualify as part of the covered entity, e.g., under Medicare’s provider‑based rules. This significantly reduces financial exposure for many hospitals. For example, the court case noted Glens Falls Hospital’s $5.9 million in lost discounts during a nine‑month delay. The ruling may also help accelerate expansion of outpatient oncology, infusion, and similar services.
Hospitals must still comply with all statutory 340B requirements, maintain auditable records, and confirm that patients meet the 340B patient definition, but HRSA cannot withhold program eligibility based on registration timing. While HRSA may continue to operate OPAIS as an identification system, the agency cannot block hospitals from accessing 340B pricing simply because a child site has not yet appeared in the database.
How Forvis Mazars Can Help
Our team at Forvis Mazars has extensive experience supporting compliance and performance improvement for 340B-covered entities. If you have questions about the evolving policy environment and how it may affect your organization, please reach out to our professionals today.
- 1“D.C. Federal District Court Sides With Hospitals, Strikes Down HRSA’s 340B Offsite Registration Policy,” 340report.com, March 4, 2026.