Local Health Care Protection Act of 2026

This bill, known as the "Local Health Care Protection Act of 2026," establishes a temporary eligibility exception for certain hospitals participating in the 340B drug discount program. It allows hospitals that fail to meet the applicable disproportionate share adjustment percentage requirements, often due to Medicaid program cuts, to still be considered covered entities. This exception is valid for cost reporting periods beginning in fiscal year 2026 and ending by September 30, 2030, provided the hospital was already a 340B covered entity by July 3, 2025, and meets all other program requirements. Additionally, the legislation mandates the Comptroller General to conduct a comprehensive study and submit a report to Congress within one year of enactment. This report will analyze the criteria for 340B covered entities and state-level determinations for hospitals serving a disproportionate number of low-income patients. It will also evaluate the impact of declining payments in rural areas, review proposals to revise payment adjustment formulas, and assess their strengths and weaknesses. Furthermore, the report will analyze the current methodology for payment adjustments and identify common factors leading to their decline, such as disability determinations and limited post-acute care capacity.