340B Drug Pricing Program ‘Mega Guidance’ – Key Takeaways

innova 340B

HRSA has released guidance on the 340B drug pricing program. The guidance will likely be published in the Federal Register late summer. While the guidance addresses a range of topics, it will presumably focus on the definition of patient, contract pharmacy compliance requirements, hospital eligibility criteria and eligibility of off-site outpatient locations.


340B Drug Pricing Program Covered Entities

All off-site outpatient facilities and clinics not located at the same physical address as the parent hospital facility will be listed on the public 340B database. Off-site outpatient facilities are able to purchase and use 340B drugs under the following two conditions:

  • Each facility is listed on a line of the cost report that is reimbursable under Medicare
  • The service provided at the facility has associated outpatient Medicare costs and charges


340B Patient Eligibility

Individuals who are not patients of a covered entity are not eligible to receive drugs purchased through the drug discount program. An individual must meet the following criteria to be considered a 340B patient:

  • The individual receives a healthcare service at a facility registered and listed in the 340B Program.
  • A covered entity provider can provide services to an individual when the provider is employed by the covered entity or is an independent contractor for the covered entity.
  • An individual receives a drug that is prescribed by the covered entity provider as a result of the services stated above.
  • The individual’s healthcare must be consistent with the service or range of services designated in the federal grant, project, designation or contract.
  • Drugs are ordered or prescribed pursuant to a healthcare service that is classified as outpatient.
  • Patient records are maintained by the covered entity and demonstrate that the covered entity is responsible for care.



Covered entities removed from the program due to eligibility requirement violations would be able to re-enroll during the next regular enrollment period after it had complied with all HHS statutory requirements and offered repayment to affected manufacturers, if necessary.


GPO Restriction

We anticipate that HHS will clarify in its guidance the group purchasing organization prohibition for certain covered entities. Off-site outpatient facilities, which are not listed on the public 340B database will be able to access outpatient drugs through a GPO assuming the facility has a purchasing account separate from that of any 340B enrolled facility. Drugs purchased through GPO can never be provided to outpatients of the hospital or other care sites enrolled in the program.



Hospitals may utilize GPO’s when a drug cannot be accessed at the 340B price or at wholesale acquisition cost to prevent disruptions in patient care. Compliant hospitals that use a GPO for covered outpatient drugs in these situations must record the facts surrounding the purchase and provide documentation to HHS.


Maintenance of 340B Drug Discount Program Records

HHS is considering establishing a standard time interval for record retention. The Standard should attempt to balance the need for a covered Entity to document compliance with program requirements with the effort and expense required to maintain records for any extended period of time.


Statutory Requirements and Compliance

HHS is introducing compliance mechanisms for covered entities that contract with pharmacies to dispense 340B priced drugs. Covered should take the opportunity to review and reconcile pertinent 340B drug pricing program patient eligibility status through routine audits and review of contracted pharmacy operations. We suggest that Covered Entities should compare prescribing records with the contracted pharmacy records every 3 months.


Referral for services for Specialty Services

The proposed guidance suggests that this area of practice will be very limited, if proposed language is adopted without substantial changes. Entities should give careful consideration to future use of referrals and the related documentation of such services in the patient’s medical record. In the current state, any referral should be documented in the record as well as evidence of the subsequent care plan or treatment plan. Additionally, the Entity should ensure the Primary care provider accepts the report or plan and is assuming responsibility for any care provided pursuant to the plan.


Key to Compliance

All 340B drug pricing program -eligible grantees or other eligible Entities should be creating action plans to respond to the final published guidance with a goal to achieve and maintain a compliant program.

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