We’re 340Back! Review of Major Developments to the 340B Program

It’s been a roller coaster two years for the 340B Program, and we are now back to review some of the major developments and program changes during this time. On the highest level, despite a flurry of proposed legislative action, the 340B Program remains largely unchanged from where it stood prior to 2017. As covered in more detail below, the notable exception to this is the significant Medicare Part B reimbursement reductions for certain categories of 340B covered entities. Of course, in typical 340B Program “see saw” fashion, the future of these reimbursement reductions remains uncertain after a surprising recent court decision striking down the legality of these reductions for 2018. The 340B Program has also seen changes in the audit process for covered entities, which we discuss below.

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The Omnibus Guidance is Dead!

Prescription Pill Box-700_440The proposed 340B Drug Pricing Program Omnibus Guidance that was issued in August 2015 and promised to turn the 340B world on its head was withdrawn on January 30, 2017.

Not that most covered entities are upset. The proposed 340B Drug Pricing Program Omnibus Guidance proposed a host of changes to the 340B Drug Pricing Program, a law that requires drug manufacturers to provide discounts on “covered outpatient drugs” to “covered entities,” when those “covered entities” provide the drug to “eligible patients.” As we’ve covered in multiple posts, these changes ran the gamut–and most of the time, to the detriment of covered entities. Probably the most significant proposed change was the overhaul of the patient definition, which, among other things, tightened the nexus between a patient, a prescriber, and the covered entity registered site. Continue Reading

Key Takeaway from 340B Conferences – Audits

ChecklistYep. Audits. They are happening. And, chances are, if your covered entity (“CE”) hasn’t experienced one yet, it is coming to you sometime soon. At both 340B University (hosted by Apexus, the prime vendor for the 340B Drug Pricing Program) and the 340B Coalition Conference (hosted by 340B Health) many CEs we interacted with had already experienced the Health Resources and Services Administration (“HRSA”) audit process. Continue Reading

Comparing 340B University and the 340B Coalition Conference

Spoonful_Pills_101337746Maybe it is just us, but we wanted to know whether we would get a different experience at 340B University versus the 340B Coalition Conference.  In some ways, these conferences could not have been more different. But, at the heart of it all, each had the same underlying education of stakeholders so that covered entities (“CEs”) can continue stretching “scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

340B University

The 340B Prime Vendor, Apexus, puts on this educational program. Apexus is the “exclusive contractor” for the 340B Drug Pricing Program (“340B Program”). As the 340B Prime Vendor, Apexus works closely with the Health Resources and Services Administration (“HRSA”) to provide education to providers. Continue Reading

Top Takeaway from 340B University and 340B Coalition Conference

iStock_000022216040_FullThis year we once again had boots on the ground for 340B University and the 340B Winter Coalition Conference for a four-day 340B Drug Pricing Program (340B Program) adventure. 340B University is free of charge and is put on by the 340B Prime Vendor, Apexus. The 340B Coalition Conference, on the other hand, charges a fee and is organized by 340B Health, a membership organization that advocates for covered entities (CEs).

In this post, we disclose the number one lesson from this four-day, 340B Program extravaganza—compliance is hard, and it will only get harder. In the posts to come, we will explore other takeaways. Continue Reading

Site Neutral Payments Put 340B Child Sites in Jeopardy

Just when yOnline Bankingou thought you understood all the threats facing the 340B Drug Pricing Program (“340B Program”), along comes the Bipartisan Budget Act of 2015 (“BBA 2015). BBA 2015 changes the way in which new off-campus hospital outpatient departments (“HOPDs”) will be paid come January 1, 2017. This change could have a substantial impact on 340B Program child site eligibility.

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PhRMA 2-0 in The Orphan Drug Wars

U.S. Federal District Court Judge for the District of Columbia, Rudolph Contreras, ruled Wednesday, October 14, 2015 that manufacturers need not offer 340B discounts for orphan drugs sold to a specified group of covered entities (CEs), regardless of how the orphan drug is used.

To make a very long story short, in 2010, the Patient Protection and Affordable Care Act (PPACA) made several changes to the 340B Program.  In part, it added several new CEs (e.g., children’s hospitals and critical access hospitals) and narrowed the categories of drugs to which a specified group of CEs would have access at 340B discount prices by creating the orphan drug exclusion.  This specified group of CEs subject to the orphan drug exclusion include free-standing cancer hospitals, rural referral centers, sole community hospitals, and critical access hospitals.

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Breaking Down the Proposed Omnibus Guidance – Child Sites

It is coming down to the wire – comments are due on the 340B Drug Pricing Program Omnibus Guidance (“Guidance”) in about two weeks!  On October 28, 2015 the comment period will be closed and there will be nothing left to do but sit back and wait.

iStock_000002544704_FullThis post will focus on an aspect of the 340B Program that could undergo significant changes under the proposed Guidance – child sites. What are we talking about here?  Currently and under the proposed Guidance, all offsite outpatient facilities, clinics, eligible offsite location, or associated health care delivery sites (collectively referred to as “offsite facilities”) not located at the same physical address as the “parent” covered entity (“CE”) must be registered in the 340B Program, if the offsite facilities intend to purchase and use 340B drugs for their eligible patients.  Easy enough.  But, as tends to be the case in the 340B Program, the devil lies in the details.

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Breaking Down the Proposed Omnibus Guidance – Covered Entity Eligibility, Registration & Termination

As promised, the blog will be taking an in-depth look at discrete topics included in the proposed 340B Drug Pricing Program Omnibus Guidance (“Guidance”), which was published August 28, 2015. The proposed Guidance touches on almost every aspect of the 340B Program, including covered entity (“CE”) eligibility; the patient definition; Group Purchasing Organization prohibitions; contract pharmacies; duplicate discounts; and CE audits. It also includes enhanced program integrity requirements for CEs, contract pharmacies, and pharmaceutical manufacturers participating in the 340B Program. Today’s blog will take a look at CE eligibility, registration, and termination.


Let’s start with the basics. Only CEs are eligible to participate in the 340B Program. These CEs are both non-hospital (e.g., STD clinic) and hospital (e.g., children’s hospital) entities. The proposed Guidance delineates the eligibility elements that have been established by the law, existing regulations, and past guidance. Once an eligible CE registers in the 340B Program, it is listed on the public 340B database. The registration conditions, deadlines, and procedures remain the same as outlined in previous guidance.  As is the current practice, CEs must immediately notify the Health Resources and Services Administration (“HRSA”) regarding any changes in eligibility and CEs will still be required to annually recertify with HRSA.

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The Proposed 340B Drug Pricing Program Omnibus Guidelines Have Landed

ThinkstockPhotos-477811161It is official: The Health Resources and Services Administration (“HRSA”) has published the long-awaited “Mega Guidance.” The Proposed 340B Drug Pricing Program Omnibus Guidelines (“Guidelines”) were published in the Federal Register on August 28, 2015. Any comments must be submitted on or before October 27, 2015.

The proposed Guidelines aim to “add clarity in the marketplace for all 340B Program stakeholders and strengthen the [U.S. Department of Health and Human Services’] HHS’s ability to administer the 340B Program.” This clarity will likely prove useful to manufacturers in the wake of the June proposed rulemaking, which proposed to authorize the HHS Office of the Inspector General to pursue civil monetary penalties from manufacturers for violation of the 340B Program requirements.

From a covered entity’s perspective, one of the most significant changes the proposed Guidelines make to existing law, guidance, and resources from HRSA and its contracted 340B Prime Vendor, Apexus, is the definition of a patient. Briefly, 340B Program covered entities may only provide covered outpatient drugs to “patients.” As it stands now, an individual is a patient of a 340B covered entity (with the exception of State-operated or funded AIDS drug purchasing assistance programs) only if:

  1. The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual’s health care; and
  2. The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g. referral for consultation) such that responsibility for the care provided remains with the covered entity; and
  3. The individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-qualified health center look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement.

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