Surprise move by HRSA creates expedited 340B pathway for new provider-based off-site locations
In a surprise and significant move, 340B Health announced that according to information they have received from HRSA, hospitals will no longer have to wait until new provider-based off-site locations appear on a filed Medicare cost report (MCR) to be eligible to participate in the 340B program. This change would materially impact hospitals time to use 340B drugs for eligible patients in those locations and could reduce that time by up to 22 months, which would create valuable savings to help support the care of their most vulnerable patients.
Under this change, HRSA is allowing hospitals to consider patients 340B-eligible in new locations of the hospital that are reimbursable under Medicare cost reporting rules, even if the new location has not yet appeared on a filed MCR. This move supports and is consistent with HRSA’s focus on the statutory meaning of “patient,” as Medicare considers such individuals to be patients of the hospital even though they have not yet appeared on a filed MCR.
HRSA will continue to require that hospitals register these new off-site locations with the Office of Pharmacy Affairs Information System (OPAIS) once they have appeared on a filed MCR. Previously, use of 340B in a provider-based clinic that had not yet appeared on a filed MCR risked receiving a diversion finding in a HRSA audit. 340B Health has indicated that it is their understanding that hospitals no longer are at risk of receiving a diversion finding in such circumstances if they outline those situations in their policies and procedures and maintain auditable records. With this change, Visante recommends that 340B hospitals using this new opportunity under these new HRSA provisions make sure that they are auditing sufficient numbers of claims from these new locations to demonstrate full compliance with all 340B program requirements including that the hospital maintain a record of the patient’s care, maintain a relationship (employment, contractual, or other arrangement) with the health care professional treating the patient, and maintain responsibility for the patient’s care.
340B hospitals should address the use of 340B drugs in new provider-based outpatient clinics and services that are not included in the most recently filed MCR and include language in their policies and procedures that explains why patients seen in these locations are considered to be eligible patients of the hospital as outlined in the 1996 guidance (e.g., the outpatient department meets Medicare provider-based rules to be treated as part of the hospital). If a wholesale distributor will not ship 340B drugs to locations that are not registered on OPAIS, a hospital may need to ship those orders to a registered “ship to” location of the hospital and redistribute them to the eligible locations where they are needed for eligible patients. If this is the case, hospitals should maintain clear and auditable records of these purchases and transfers.
While this change will certainly help address COVID-19 pressures It is important to note that this change is intended to continue in effect after the public health emergency ends. We understand that HRSA and Apexus will update their FAQ pages to address this new information and hospitals should watch for this change in guidance documentation.