HRSA Is Offering 340B Flexibility During Public Health Emergency

As healthcare providers adjust operations in response to COVID-19, 340B hospitals should review HRSA’s guidance regarding 340B-eligibility requirements during Public Health Emergencies. Overall, HRSA offers Covered Entities significant flexibility to continue providing healthcare services through modified delivery mechanisms (such as telehealth) without jeopardizing 340B eligibility. Most importantly, Covered Entities should ensure that they have clear policies and procedures that detail how they determine 340B eligibility during Public Health Emergencies. If audited, HRSA will look primarily at these policies to confirm that Covered Entities are in compliance.

In creating policies & procedures and making adjustments to 340B operations, Covered Entities should keep the following items in mind:

  • The patient must still be considered a patient of the Covered Entity to be considered 340B-eligible, in accordance with HRSA and HHS regulations.
  • Abbreviated health records may be acceptable to establish eligibility requirements, as long as the record adequately identifies the patient, provider(s), medical evaluation, and the treatment/drug provided. Documentation in the patient record should make clear that the Covered Entity is responsible for the patient’s care, and should identify the nature of the emergent situation if applicable.
  • Self-reporting of patient’s payor is sufficient. In other words, the Covered Entity is not required to scan and verify the payor before recording a visit in the patient record.
  • For eligible providers (even volunteer providers), documentation should be generated to make the relationship between provider and Covered Entity clear, and appropriately show that the Covered Entity is maintaining responsibility for the patient’s care.
  • The Covered Entity should ensure its emergency processes are reflected in its 340B policies and procedures, and that auditable records are maintained to demonstrate compliance with those policies

March 21, 2020 UPDATE

HRSA just released new, COVID-19 specific guidance in response to numerous inquiries relating to the scope of flexibility during this pandemic. The new guidance and any future updates from HRSA can be found here. In addition to the COVID-19 guidance, HRSA stated that it will continue all scheduled 340B audits, but will conduct them remotely. Advis has summarized key takeaways below:

  • 340B Eligible Patient requirements will remain the same
  • 340B drugs must not be transferred to a patient who is not a patient of the Covered Entity
  • Covered Entities subject to the GPO Prohibition still must not purchase covered outpatient drugs through a GPO. However, if the Covered Entity cannot purchase a covered outpatient drug at the 340B price or at WAC due to shortages, a Covered Entity may use a GPO only if it immediately notifies HRSA detailing the following:
    • Covered outpatient drug involved
    • Manufacturer
    • Communication between the Covered Entity and manufacturer detailing why the drug was not available at 340B or WAC
  • A Covered Entity’s policies and procedures remain key to outlining how the hospital’s operations may change in the event of a Public Health Emergency

March 23, 2020 UPDATE

HRSA updated their approach to GPO Prohibition violations, with respect to COVID-19. Under HRSA’s new guidance, In instances of shortages where drugs cannot be purchased via 340B or WAC, notice to HRSA is no longer required. Covered Entities must continue to track applicable GPO purchases and maintain auditable records.

Advis will continue to monitor any additional updates from HRSA. In the meantime, if you have questions regarding 340B compliance for specific scenarios or require assistance in drafting Public Health Emergency policies and procedures for 340B or other matters, contact one of Advis’s 340B experts: Dan Avants (davants@advis.com), Amanda Bogle (abogle@advis.com), and Michael French (mfrench@advis.com).

Published: March 18, 2020

Updated: March 26, 2020