Disproportionate Share Hospitals

Eligibility

Disproportionate Share Hospitals are defined in Section 1886(d)(1)(B) of the Social Security Act.

Disproportionate Share Hospitals serve low-income patients and receive payments from the Centers for Medicare & Medicaid 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).

Disproportionate Share Hospitals must be classified as one of these:

• 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
• Owned or operated by a unit of state or local government
• A public or private nonprofit corporation that is formally granted governmental powers by a unit of state or local government

And must:

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

For-profit hospitals aren't eligible to participate in the 340B Program.

Eligibility in multiple categories

Hospitals that are eligible to participate in the 340B Drug Pricing Program in more than one category must select only one. For example, a hospital that is both as a Disproportionate Share Hospital and a Sole Community Hospital must choose only one category and must follow requirements and guidelines for that category once enrolled.

340B registration

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