Virginia’s Community Health Centers (CHCs) are quiet but essential cornerstones of our healthcare system, serving hundreds of thousands of patients each year regardless of income or insurance status. As leaders entrusted with protecting the health of all Virginians, I urge careful reconsideration of a policy proposal that risks weakening this vital safety net.
At issue is Item 291 #14c in the commonwealth’s budget, which would impose additional state-level reporting requirements on participants in the federal 340B Drug Pricing Program. While transparency and accountability are important, this proposal would create significant, unfunded administrative burdens for CHCs without meaningfully improving patient care.
For more than 60 years, Virginia’s CHCs have served medically underserved communities across the commonwealth. In 2024 alone, they cared for approximately 422,000 patients across nearly 1.5 million visits, including more than 149,000 Medicaid recipients. CHCs are more than clinics. They’re lifelines, offering primary care, behavioral health, dental services, school-based care and medications to individuals and families who might otherwise go without.
As Federally Qualified Health Centers (FQHCs), CHCs already operate under rigorous federal requirements. By law, they must serve all patients regardless of ability to pay, provide sliding fee scales for low-income individuals, participate in Medicaid and report extensively on their use of federal funds and program income. This includes oversight of revenues tied to the 340B Drug Pricing Program, which enables CHCs to stretch their limited resources and expand services.
The 340B program is governed by a robust federal compliance framework. The Health Resources and Services Administration (HRSA) conducts audits, enforces reporting standards, administers dispute resolution processes and maintains safeguards like the Medicaid Exclusion File to prevent duplicate discounts. Item 291 #14c doesn’t account for these existing protections. Instead, it layers on duplicative reporting requirements that would strain already limited resources. For CHCs operating on razor thin margins, this means diverting staff time and funding away from lifesaving patient care and toward administrative compliance.
Demand for community-based care is rising, particularly as Medicaid disenrollment increases and more Virginians become uninsured or underinsured. This is precisely the time to strengthen our healthcare safety net, not strain it with unnecessary mandates.
Recognizing the need for an evidence-based approach, the General Assembly recently passed Senate Bill 278, commissioning a comprehensive study of the 340B program’s impact in Virginia. This study is intended to guide future policy decisions with data and stakeholder input. Moving forward with sweeping new requirements before its completion would be premature and risks implementing measures misaligned with both the study’s findings and patients’ needs.
I respectfully urge a measured, evidence-based approach before implementing new 340B reporting requirements. Specifically, I ask that you withhold support for Item 291 #14c in its current form and allow the study authorized under Senate Bill 278 to be completed. Its findings will provide the necessary context to determine whether additional oversight is warranted and how to design it without duplicating federal requirements or burdening providers unnecessarily.
If gaps in oversight are identified, Virginia Community Healthcare Association stands ready to collaborate with your administration and the General Assembly to develop thoughtful, targeted solutions. Until then, we must avoid policies that place added strain on the providers serving our most vulnerable populations.
Every healthcare policy should answer a simple question: will this improve care for patients? As written, Item 291 #14c risks doing the opposite, diverting time, attention, and resources away from those who need them most.
Virginia’s CHCs are committed partners in advancing the health of our commonwealth. We ask that state policy support, not hinder, this shared mission.
Tracy Douglas is CEO of Virginia Community Healthcare Association.
