COVID-19 implications for 340B
The Secretary of the Department of Health and Human Services (HHS) Alex Azar, declared a public health emergency under the Public Health Service Act (PHSA) on January 31, 2020, to aid the nation’s healthcare community in responding to 2019 novel coronavirus. The declaration stated in part, “The emergency declaration gives state, tribal, and local health departments more flexibility to request that HHS authorize them to temporarily reassign state, local, and tribal personnel to respond to 2019-nCoV if their salaries normally are funded in whole or in part by Public Health Service Act programs. These personnel could assist with public health information campaigns and other response activities.”
On March 13, 2020, the President declared a public health emergency under the National Emergencies Act, a move that frees up billions of dollars in federal funds and sets the Federal Emergency Management Agency in motion.
As a result of the COVID-19 pandemic and concerns voiced by many Covered Entities, HRSA issued the following statement: HRSA understands that many 340B stakeholders are concerned about the evolving impact of the COVID-19 pandemic. The circumstances surrounding this public health emergency may warrant additional flexibilities, especially to affected 340B covered entities. To the extent a 340B stakeholder has a specific circumstance where they believe their COVID-19 response may affect their compliance or eligibility in the 340B Program, the stakeholder should contact the 340B Prime Vendor at 1-888-340-2787 (Monday – Friday, 9 a.m. – 6 p.m. ET) or firstname.lastname@example.org . The 340B Prime Vendor will coordinate with HRSA to provide technical assistance and evaluate each issue on a case-by-case basis. Below are general flexibilities that covered entities should adhere to during this public health emergency.
In response to the COVID-19 pandemic, HRSA has issued several positions of flexibility including:
- Record keeping
- Temporary expansion sites
- 340B audits
With respect to the GPO Prohibition, HRSA has issued the following statement:
HRSA is unable to waive the 340B statutory requirements, specifically with respect to the Group Purchasing Organization (GPO) prohibition pursuant to section 340B(a)(4)(L)(iii) of the Public Health Service Act. Hospitals that are subject to the GPO prohibition include disproportionate share hospitals, children’s hospitals, and freestanding cancer hospitals.
These hospitals may not use a GPO for covered outpatient drugs at any time, including private label products. However, if a hospital is unable to purchase a covered outpatient drug at the 340B ceiling price, the covered entity should first try to obtain the drug at wholesale acquisition cost (WAC). If it is also unable to purchase the product at WAC due to shortages, a hospital may use a GPO (or GPO private label products). Hospitals do not need to report this information to HRSA under the COVID-19 public health emergency. The covered entity should address these situations in their policies and procedures, and it must continue to keep auditable records. This is a significant change, and appropriate documentation and record keeping is critical for compliance success in regard to this allowance.
In a webinar presented by PPSV on April 3, the following statement was made concerning Relaxed Documentation Standards for Patient Definition:
- OPA will accept an abbreviated medial record, self-reporting of patient medical and insurance information, and contact information for volunteer health workers to support patient relationship
- These relaxed documentation standards apply to all health care visits, not just telehealth
A webinar presented by 340B Health on April 2, 2020, discussed several recent HRSA audits that indicate more flexibility in defining the location where a prescription is written.
In addressing COVID-19 and Patient Definition it stated:
- Covered Entities should address definition of a 340B patient during an emergency in Policies & Procedures
- Care is being provided by a health care professional employed by the hospital or under a contractual or other relationship or arrangement (e.g. referral for consultation); and
- The hospital owns the medical record or has joint access to the medical record with the professional providing the care
- If an abbreviated health record such as a single form or note page is maintained during a public health emergency, the record, at a minimum:
- Identifies the patient
- Records the medical evaluation, including any testing, diagnosis, or clinical impressions, and the treatment provided or prescribed
In addition, it stated that HRSA:
- Appears to be more flexible around location where prescription is written
- May not be required to be written on the premises; not tied to receiving referral notes from non-hospital clinics
- The covered entity must still show:
- Patient received services at the hospital documented in the medical record
- Hospital owns, or has access to, the record that documents the care
- No change related to infusion orders o
- May be written by outside providers; hospital does not need to have access to records maintained by outside providers but must administer the infusion to the patient and document the procedure
A 340B Health webinar titled COVID-19 Webinar 340B Flexibilities on April 7 discussed several new HRSA flexibilities related to the COVID-19 pandemic. The webinar addressed several enrollment flexibilities including:
HRSA, upon request and review, is allowing some entities to immediately enroll in 340B. Case-by-case requests are to be submitted to the 340B Prime Vendor Apexus at 1-888-340-278 for:
- Immediate registration of facilities and contract pharmacies
- Temporary moving of clinics from within a hospital’s four walls
The request must include
- confirmation that the need for immediate registration is related to the hospital’s response to COVID-19
- a detailed explanation of the urgency for immediate registration
- a specific description of what the facility will be used for
- and confirmation that the facility is listed as reimbursable on the Medicare Cost Report and meets all other 340B program requirements
The HRSA website, under the COVID-19 Resources section, provides the following statement: HRSA understands that the use of technology in health care delivery during this time is critical, and that telemedicine is merely a mode by which the health care service is delivered. For the 340B Program, HRSA recommends that covered entities outline the use of these modalities in their policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug.
Although HRSA has previously stated that telemedicine is merely a mode by which the health care service is delivered, there have recently been significant changes to telehealth rules and regulations in response to the COVID-19 pandemic that offer increased flexibility to 340B covered entities.
Specific new advantages include:
- Waiving Medicare coverage for telehealth services regardless of whether patient is in a rural area
- Waiving the “originating site” requirement, meaning services can be provided to beneficiaries in any healthcare facility, as well as in their home.
New Telehealth covered services now include:
- Emergency department visits
- Observation day management
- Critical care
- Home visits
- Intensive care
- Radiation treatment management
- Established Patient Requirement Eliminated for:
- Remote patient monitoring
- Telephone calls and virtual check-ins
- Digital e-visits
- Medicare pays the same amount for telehealth services as it would if the service were furnished in person.
Visante strongly recommends that all Covered Entities be vigilant to HRSA’s recommendation that Covered Entities outline the use of these modalities in their policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug.
Temporary Expansion Sites
The 340B Health webinar referenced above also discussed recent CMS guidelines to permit hospitals to provide inpatient and outpatient services in locations beyond their existing walls, including:
- Ambulatory surgical centers
- Free-standing emergency departments
- Inpatient rehabilitation hospitals
- Hotels and dormitories
Notably, CMS considers services provided in temporary expansion sites to be “hospital based.”
HRSA has made the following statement regarding 340B audits: Based on the current COVID-19 pandemic, HRSA is moving towards conducting 340B Program covered entity audits remotely (virtually) for the next several months while we monitor and assess the impact on the covered entities. If a covered entity has specific questions regarding an audit once it has been engaged, please contact the Bizzell Group (the 340B audit contractor) at email@example.com who will coordinate with HRSA based on the specifics of the request. HRSA will continue to monitor the COVID-19 response and provide updates accordingly.
Due to the time constraints encountered in dealing with the COVID-19 pandemic, 340B Health requested postponement of the 340B compliance audits. HRSA responded stating:
- Onsite audits will be changed to virtual review
- Case-by-case accommodations may be granted as requested:
- additional preparation time
An article in the May 15 issue of Modern Healthcare reported that some safety-net hospitals are concerned that delays of non-urgent procedures due to the COVID-19 pandemic could make them ineligible for the 340B drug discount program.
The article stated that hospitals are concerned drastic changes in the number of patients treated could alter their payer mixes and temporarily change their 340B eligibility. Obviously, the opposite effect could also occur. Depending on the long-term economic impacts of the pandemic, there is also a chance that more facilities might become eligible if their Medicaid patients increase.
Shahid Zaman, a principal policy analyst at America’s Essential Hospitals, stated “HRSA has some discretion over enforcement. So far, the agency has only said that hospitals concerned about their eligibility should reach out to Apexus, the 340B Prime Vendor, for technical assistance on a case-by-case basis.”
The hospital demands have gained some traction with lawmakers. Sen. Ben Sasse (R-Neb.) in April introduced a bill to pause 340B redeterminations, and a bipartisan group of 121 House lawmakers asked congressional leadership to give hospitals extra flexibility in the event their payer mixes change. However, the proposal was left out of the House Democrats’ fifth COVID-19 legislative package.
The COVID-19 pandemic has resulted in several flexibility changes that affect 340B covered entities. These changes have been made by both HRSA and CMS.
While the changes may certainly be beneficial to covered entities, Visante cautions ALL TYPES of covered entities that such changes are NOT permanent. The pandemic crisis that created the need for many flexibilities will end at some time. Will the flexibilities also end? Will there be a period during which some flexibilities may be terminated while others continue? Time will tell.
Visante strongly suggests 340B Covered Entities understand that at some point rules and guidelines made more flexible will revert to those in effect prior to the COVID-19 pandemic. Visante also urges Covered Entities to address all of the new flexibility situations in their policies and procedures and to continue to maintain auditable records.
340B Drug Pricing Program COVID-19 Resources
HRSA website March 2020 FAQ
Telehealth and Covid-19 PPSV Webinar April 3, 2020
340B Health Audit Trends Webinar April 2, 2020
340B Health COVID-19 Webinar May 7, 2020 340B Flexibilities
Your 340B Report for Thursday April 16, 2020
Modern Healthcare May 15, 2020