Who qualifies as a 340B covered entity?
Eligibility is defined by statute, and it is narrower than most people assume. Being a non-profit hospital is not sufficient. Serving low-income patients is not sufficient. Here is the actual list.
At a glance
- Entity categories
- 14
- Registered sites
- 60,000+
- Governing statute
- Section 340B(a)(4)
- Registry
- HRSA OPAIS (public)
Hospitals eligible for 340B
Hospital eligibility generally requires a qualifying ownership or contractual relationship with state or local government, plus a category-specific test.
Disproportionate Share Hospital (DSH)
- Core eligibility test
- DSH adjustment percentage above the statutory threshold, plus qualifying government ownership, public status or contract
- GPO prohibition
- Applies
- Orphan drug exclusion
- Not applicable
Children's Hospital
- Core eligibility test
- Free-standing children's hospital meeting the DSH-equivalent threshold
- GPO prohibition
- Applies
- Orphan drug exclusion
- Not applicable
Free-standing Cancer Hospital
- Core eligibility test
- Meets the DSH-equivalent threshold and cancer hospital criteria
- GPO prohibition
- Applies
- Orphan drug exclusion
- Applies
Critical Access Hospital (CAH)
- Core eligibility test
- Certified as a critical access hospital under Medicare
- GPO prohibition
- Exempt
- Orphan drug exclusion
- Applies
Rural Referral Center (RRC)
- Core eligibility test
- RRC classification plus the applicable DSH threshold
- GPO prohibition
- Exempt
- Orphan drug exclusion
- Applies
Sole Community Hospital (SCH)
- Core eligibility test
- SCH classification plus the applicable DSH threshold
- GPO prohibition
- Exempt
- Orphan drug exclusion
- Applies
Hospital child sites must appear as reimbursable outpatient facilities on the most recently filed Medicare cost report before they can be registered. This is the most common source of eligibility findings.
Federal grantees eligible for 340B
Grantee eligibility flows from a federal grant or designation. Registration is governed by scope of project rather than by a Medicare cost report.
Federally Qualified Health Center (FQHC)
- Basis of eligibility
- Health Center Program grant under Section 330 of the Public Health Service Act
FQHC Look-Alike
- Basis of eligibility
- HRSA look-alike designation — meets Health Center Program requirements without receiving the grant
Ryan White HIV/AIDS Program
- Basis of eligibility
- Grantee or eligible subrecipient under the Ryan White program
Sexually Transmitted Disease clinic
- Basis of eligibility
- Receives federal STD prevention funding
Tuberculosis clinic
- Basis of eligibility
- Receives federal TB program funding
Title X Family Planning clinic
- Basis of eligibility
- Title X family planning grantee
Black Lung clinic
- Basis of eligibility
- Federal black lung program funding
Hemophilia Treatment Center
- Basis of eligibility
- Federally funded hemophilia diagnostic and treatment center
Urban Indian organization
- Basis of eligibility
- Funded under the Indian Health Care Improvement Act
Native Hawaiian Health Center
- Basis of eligibility
- Funded under the Native Hawaiian Health Care Improvement Act
Confirm your category before anything else.
Everything downstream — GPO exposure, patient definition nuances, recertification requirements — follows from which of the fourteen categories your entity actually falls into.
Common misconceptions about eligibility
A large share of the enquiries we receive come from organizations that are not eligible and have been told otherwise. It is worth being explicit.
- Independent physician practices and physician groups are not covered entities
- Retail and specialty pharmacies are not covered entities — they can only participate as contract pharmacies for an eligible entity
- Being a non-profit hospital is not by itself sufficient; the DSH threshold and government relationship tests still apply
- Serving a low-income population is not an independent basis for eligibility
- Urgent care centers, ambulatory surgery centers and standalone imaging centers do not qualify
- A site within an eligible entity is not automatically eligible — it must be separately registered and evidenced
We confirm eligibility at no cost on an initial call. It is the fastest way to avoid building a plan on a false premise.
Eligibility — common questions
Can a physician practice we acquired become 340B eligible?
Potentially, as a child site of your hospital — but only once it appears as a reimbursable outpatient facility on your most recently filed Medicare cost report, and only from the effective date of its registration. This lag is often several quarters and should be planned for at acquisition.
What is a child site?
An outpatient location that operates as part of a registered covered entity and is separately listed in OPAIS. Each child site must independently satisfy the eligibility evidence requirement — for hospitals, the cost report test; for grantees, scope of project.
Can a pharmacy be a covered entity?
No. Pharmacies participate only as contract pharmacies acting on behalf of a covered entity under a written agreement. The eligibility, the compliance obligation and the liability all remain with the covered entity.
How do we know if our DSH percentage qualifies?
The DSH adjustment percentage comes from your Medicare cost report and must exceed the statutory threshold for your hospital category. It is recalculated as cost reports are filed, which means eligibility can change — both directions — and should be monitored rather than assumed permanent.
Is the covered entity list public?
Yes. HRSA maintains OPAIS as a public, searchable database of every registered covered entity, site and contract pharmacy arrangement. Anyone can look up your record, which is one reason its accuracy matters.
Not sure whether you qualify?
We confirm eligibility on an initial call at no cost. It takes about twenty minutes and prevents a great deal of wasted planning.