Several Apexus frequently asked questions (FAQs) have been released recently that have been interpreted to mean hospital 340B CEs will no longer need to wait to use 340B drugs at new or relocated provider-based clinics. Turnkey is just as pleasantly surprised as you are! Below is an attempt to clarify implications of these FAQs and highlight some important considerations. This much needed good news for hospitals means that there appears to be a renewed focus by HRSA to rely on the statutory definition of a patient, as Medicare would, and consider individuals to be patients of the hospital even though the service or department has not yet appeared on a filed Medicare Cost Report (MCR). A new provider-based location may begin to use 340B drug immediately, so long as provider-based requirements of CMS are met. The following are some caveats to consider.
1. Policy and Procedure must outline this new consideration and how auditable records must be maintained. When updating your policy, be sure to address necessary changes to definitions, as well as procedures for determining eligibility and enrollment.
Turnkey has drafted potential policy language to address the clarification made by these FAQs:
340B Eligible Location Definition: An onsite or offsite service area or facility (location) that is an integral part of a 340B hospital covered entity, as evidenced by the fact that it has reimbursable outpatient revenue and expense allocated to the hospital’s Medicare Cost report.
- New locations that are not yet registered with OPA, but that are either (i) listed on the CE’s most recently-filed Medicare cost report with reimbursable outpatient costs and charges or (ii) will be listed with such on the next filed MCR, are 340B Eligible Locations where 340B drugs can be purchased and/or used.
- Offsite 340B Eligible Locations shall be registered with OPA as soon as possible once listed on the hospital’s filed MCR. All clinics/services of an offsite 340B Eligible Location must be registered as a child site, regardless of whether they are in the same offsite building.
2. Once registered, a ship to address would be available for wholesalers to open a 340B account and ship 340B drugs to the off-site location. Until that occurs, alternate arrangements would need to be made to have 340B drug shipped to an already registered location (e.g., the parent).
3. Consider duplicate discount prevention strategies for an off-site clinic that carves-in Medicaid and uses a different NPI than the parent NPI to bill. The new clinic’s NPI would need to be added to the parent registration, and subsequently the MEF, prior to utilizing 340B drug to prevent duplicate discount.
4. This new interpretation of statute does not appear to reflect HRSA’s flexibility during the COVID-19 health emergency and is expected to continue after the emergency ends.
Turnkey has drafted potential policy language to address the clarification made by these FAQs:
Here are the newly approved FAQs:
Unpublished FAQ 1318 (5/29/20) Question: Hospitals that have only ‘costs’ associated with that cost center/dept have been rejected from 340B registration because they had to wait for revenue to be on the MCR for that cost center/dept. Does worksheet A (and/or C) have to show costs, revenue, or both? For example, a clinic might just be opened and have costs, but has not seen patients (no revenue on cost report). Would such a clinic be eligible?
Answer: HRSA is not able to register and list this site on 340B OPAIS at this time. In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report. However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.
Unpublished FAQ 1648 (5/29/20) Question: Our hospital subject to the GPO Prohibition moved a clinic outside the four walls but didn’t register it on the 340B OPAIS. It is not on the most recently filed cost report at that location but will be on our next cost report as a reimbursable clinic. Will OPA consider the site “continuously eligible?”
Answer: HRSA is not able to register and list this site on 340B OPAIS at this time. In order to be registered and listed on the 340B Office of Pharmacy Affairs Information System (OPAIS), the site must have reimbursable outpatient costs and charges on the most recently filed Medicare cost report. However, until such time the site is listed on the cost report, you should evaluate whether the patients of the site would be considered eligible patients of the hospital and defined in your policies and procedures. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility.
Published FAQ ID: 4301 (06/04/2020) Question: Are hospital covered entities able to register offsite, outpatient facilities before being listed as reimbursable on their Medicare Cost Report?
Answer: In order to register for the 340B Program and be listed on the 340B Office of Pharmacy Affairs Information System (340B OPAIS), HRSA must first verify that the offsite, outpatient facility is listed as reimbursable on the hospital’s most recently filed Medicare cost report and has associated outpatient costs and charges as outlined in HRSA’s 1994 Outpatient Hospital Facilities Guidelines. HRSA notes that for hospitals who are unable to register their outpatient facilities because they are not yet on the most recently filed Medicare Cost Report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity. More information on HRSA’s patient definition guidance can be found by reviewing the October 24, 1996 Federal Register Notice on Patient and Entity Eligibility. These situations should be clearly documented in the covered entity’s policies and procedures. In addition, a covered entity is responsible for demonstrating compliance with all 340B Program requirements and ensure that auditable records are maintained for each patient dispensed a 340B drug.
Published FAQ ID: 1193 (06/02/2020) Question: May an outpatient facility that is reimbursed by CMS as a provider-based facility, but not included on the most recently filed Medicare cost report, participate in the 340B Program?
Answer: A facility must be both reimbursable and included in the hospital’s most recently filed Medicare cost report with associated outpatient costs and charges to access the 340B Program and register in 340B OPAIS. HRSA’s outpatient facility guidelines can be found at in HRSA’s 1994 Outpatient Hospital Facilities Guidelines.
Please don’t hesitate to reach out if you have specific questions on this new development.