On July 16, 2026, the Centers for Medicare & Medicaid Services (CMS) published the 2027 Physician Fee Schedule (PFS) proposed rule. One of the most significant changes in the rule is a proposal to make 340B claims data reporting mandatory, converting what was previously a voluntary process into a required one for all 340B Covered Entities starting in 2027.

Background

Sections 11101 and 11102 of the Inflation Reduction Act of 2022 (IRA) established inflation rebates on Medicare Part B and Part D drug utilization. For Part D specifically, the law requires CMS to exclude from inflation rebate calculations any drug units for which a manufacturer already provided a discount through the 340B Drug Pricing Program. In other words, CMS cannot collect an inflation rebate on a drug that was purchased at the discounted 340B price.

To identify which claims qualify for this exclusion, CMS finalized a Prescriber-Pharmacy Methodology in the 2026 PFS final rule. Under this approach, CMS flags potentially 340B-eligible claims by checking whether the prescriber is affiliated with a registered 340B covered entity and whether the dispensing pharmacy is a contract pharmacy tied to that entity. Claims identified this way are excluded from Part D inflation rebate calculations for dates of service on or after January 01, 2026.

CMS also established a voluntary 340B Repository in the 2026 PFS final rule to collect data from covered entities, with a launch planned for fall 2026 for testing. CMS was clear at the time that data submitted to the voluntary repository would not be used in rebate calculations unless a separate rulemaking process was completed first.

The Key Change: Mandatory Reporting Starting 2027

Under the 2027 proposed rule, CMS is now proposing to make participation in the 340B Repository mandatory. Providers and suppliers that qualify as covered entities under 42 C.F.R. § 10.3 would be required to submit Part D 340B claims data to the repository on a quarterly basis, starting in 2027 for claims with dates of service on or after January 01, 2027.

The data must cover each claim for units of a covered Part D drug billed to Medicare by the covered entity or its contractors, including contract pharmacies, where a manufacturer provided a 340B discount. This includes claims from contract pharmacies identified as 340B-eligible and claims dispensed through the covered entity's own in-house pharmacy.

CMS says making this mandatory will produce more complete and reliable data, which will help the agency determine whether the repository data can eventually be used to more accurately exclude 340B units from Part D inflation rebate calculations. Even so, CMS confirms that the repository data will not be used for rebate calculations at this time. The Prescriber-Pharmacy Methodology will remain in place, and any future decision to use repository data for rebate calculations would require a separate notice-and-comment rulemaking process.

CMS also notes that fulfilling this new reporting requirement will count toward a 340B provider's obligation to provide access to documentation related to covered Part D drugs in order to maintain Medicare enrollment.

What 340B Covered Entities Should Do Now

Covered entities, including hospitals, federally qualified health centers (FQHCs), other safety-net providers, and their contract pharmacy partners, should start assessing their readiness to comply. Key steps include making sure internal systems can accurately identify 340B-eligible Part D claims, including those processed through contract pharmacies and retrospective replenishment models, setting up processes for quarterly data submissions with proper validation, monitoring updates on the repository's operational launch this fall, and submitting comments to CMS about any operational concerns before the comment deadline of September 14, 2026.