The Institute for Health Policy Accountability (IHPA), an independent authority on key drivers of decision-making in the health care space, today released a new report detailing how major nonprofit hospital systems in Washington State are exploiting the federal 340B Drug Pricing Program as they boost revenues, enrich executives, and expand operations, while failing to meaningfully support low-income and vulnerable patients.

This is IHPA’s fourth in its series of state reports examining how nonprofit hospitals nationwide abuse the 340B program, which is a federal program intended to assist low-income patients. The Washington report finds waste, fraud, and abuse at several major hospital systems that all utilize the 340b program, including Providence Health & Services, MultiCare Health System, PeaceHealth, University of Washington Medicine, and Virginia Mason Franciscan Health System.

Key findings from the IHPA Washington report include:

Denying charity care, fraud, and harming low-income patients

• Providence Health & Services was ordered by the Washington Attorney General to forgive $137 million in medical debt and refund more than $20 million to patients after deceiving low-income individuals about their eligibility for financial assistance.

• PeaceHealth agreed to a $13.4 million settlement after improperly billing more than 15,000 low-income patients who were eligible for charity care.

• Virginia Mason Franciscan Health was required to forgive $20 million in debt and issue refunds after violating Washington’s charity care laws.

• Providence and UW Medicine paid tens of millions of dollars to resolve allegations of fraudulent Medicare and Medicaid billing.

Lavish executive compensation amid layoffs and service cuts

• Providence Health & Services paid more than 20 employees over $1 million in annual compensation while announcing layoffs totaling more than 1,500 workers across 2024 and 2026.

• MultiCare and PeaceHealth each paid numerous administrators seven-figure salaries.

• Across all clinics, executive pay surged even as hospitals cited “financial challenges” to justify staffing reductions and cost-cutting.

Massive revenues and rapid growth

• Providence Health & Services Washington reported nearly $10 billion in revenue in 2023, representing a 61% year-over-year increase.

• MultiCare Health System generated more than $4.5 billion in revenue in 2023.

• PeaceHealth reported over $3.6 billion in revenue in 2023.

• UW Medicine reported significant growth in net patient service revenue, exceeding $3 billion.

Read the full report here.

BACKGROUND ON 340B:

• The 340B Drug Pricing Program was enacted by Congress in 1992 and meant to lower prescription drug costs for nonprofit hospitals that serve low-income and vulnerable communities. Instead, research shows the program has been exploited by major nonprofit health systems that generate billions in annual revenue.

• This report follows a Senate HELP Committee hearing in October 2025, where Republican Senators voiced their frustrations with the program.

• According to a CBO analysis late last year, hospitals across the U.S. have exploited the 340B Drug Pricing Program, resulting in significant waste, fraud, and abuse. The report found that the program “encourages behaviors that increase federal spending and raise prices for American taxpayers.”

The Institute for Health Policy Accountability is an independent authority on key drivers of decision making in the health care space. IHPA provides fact-based research and analysis across the public policy landscape, adding a central and currently missing voice to the conversation.