The Department of Health and Human Services
(HHS), through the Health Resources and Services Administration (HRSA), has
issued long-awaited proposed guidance on the 340B Program, which allows
eligible safety net health care providers to access lower-priced medicines.
The proposed guidance, once finalized, is intended
to help covered entities, such as certain hospitals and specialized clinics,
and drug manufacturers comply with Section 340B of the Public Health Service
According to HRSA, which is responsible for
administering Section 340B, 11,530 registered covered entities and 644 drug
manufacturers were participating in the program as of January 1.
The proposed guidance was published in the
August 28 Federal Register (80 Fed. Reg. 52300). Comments on the guidance are due October
At the time, HRSA
indicated that it planned instead to publish omnibus guidance on the340B
Program in 2015.
The proposed guidance discusses the types of
entities eligible to participate in the 340B Program, including non-hospitals
and off-site outpatient facilities and clinics.
In particular, HSRA is seeking comments on
alternatives to demonstrating the eligibility of an off-site outpatient
facility or clinic, which are not located at the same physical address as the
parent hospital covered entity.
Under the proposed guidance, off-site
outpatient facilities and clinics would be listed on the public 340B database
and be permitted to purchase and use 340B drugs for eligible patients if the
covered entity hospital demonstrates that each of the facilities or clinics is
listed on a line of the cost report reimbursable under Medicare and the
services provided at each of the facilities or clinics have associated
outpatient Medicare costs and charges.
The proposed guidance also addresses
registration and termination of participating covered entities, annual
recertification, and the group purchasing prohibition for certain covered
The proposed guidance includes a lengthy
section on “individuals eligible to receive 340B drugs.” Specifically, the HRSA
proposes to clarify the definition of “patient,” which was last addressed in
1996 guidance, for purposes of the 340B Program.
“The sale or transfer of 340B drugs to an
individual not meeting the criteria in this section of the proposed guidance is
considered diversion,” HRSA said.
“The development of this proposed guidance is
meant to address the diverse set of 340B covered entities, and was informed by
340B Program audits, through which HHS has learned more about how the
definition of patient is applied in different health care settings.”
Under the proposed guidance, an individual
would be considered a patient of a covered entity, on a
prescription-by-prescription or order-by-order basis, if the individual meets
all of the following conditions:
- The individual receives a health care service at a facility or clinic site which is registered for the 340B Program and listed on the public 340B database.
- The individual receives a health care service provided by a covered entity provider who is either employed by the covered entity or who is an independent contractor for the covered entity, such that the covered entity may bill for services on behalf of the provider.
- An individual receives a drug that is ordered or prescribed by the covered entity provider as a result of the service described in (2).
- The individual’s health care is consistent with the scope of the federal grant, project, designation, or contract.
- The individual’s drug is ordered or prescribed pursuant to a health care service that is classified as outpatient.
- The individual’s patient records are accessible to the covered entity and demonstrate that the covered entity is responsible for care.
Among the other topics addressed in the
proposed guidance are the prohibition on duplicate discounts, maintenance of
auditable records, and contract pharmacy arrangements.
In a statement, the American Hospital
Association’s Ashley Thompson, Acting Senior Executive, Policy, said the group
is reviewing the guidance and plans to seek feedback from 340B-member
“We want to make
certain that the new requirements do not overburden hospitals and strike a
balance between hospitals and pharmaceutical companies for enduring program
integrity,” the statement said.