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Disproportionate Share Hospitals


Disproportionate share hospitals are defined in Section 1886(d)(1)(B) of the Social Security Act. For more information, see the disproportionate share hospitals fact sheet (PDF - 1 MB).

Disproportionate Share Hospitals serve a significantly disproportionate number of low-income patients and receive payments from the Centers for Medicaid and Medicare Services to cover the costs of providing care to uninsured patients.

To be eligible to participate in the 340B Drug Pricing Program, disproportionate share hospitals must meet the requirements of 42 USC 256b(a)(4)(L).

To be eligible to participate in the 340B Program and purchase outpatient drugs at significantly discounted prices, Disproportionate Share Hospitals must be one of the following classifications:

  • A private nonprofit hospital under contract with state or local government to provide health care services to low income individuals who are not eligible for Medicare or Medicaid; or
  • Owned or operated by a unit of state or local government; or
  • A public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government.

For-profit hospitals are not eligible to participate in the 340B program.

To be eligible to participate in the 340B Drug Pricing Program, Disproportionate Share Hospitals must:

  • Have a disproportionate share adjustment percentage greater than 11.75% for the most-recently filed cost report

Eligible in Multiple Categories

Hospitals that are eligible to participate in the 340B Drug Pricing Program in more than one category may select one. For example, a hospital that is both as a Disproportionate Share Hospital and a Sole Community Hospital may choose either type of eligibility and must abide by requirements and guidelines for that type of eligible organization/covered entity once enrolled.

340B Registration

Register Start Date
January 1-15 April 1
April 1-15 July 1
July 1-15 October 1
October 1-15 January 1

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