HRSA Issues New Guidance: New Hospital Locations Immediately 340B- Eligible

HRSA has issued new, permanent guidance for when newly established hospital outpatient departments (HOPDs) are considered 340B-eligible. Most importantly, for new HOPDs, Covered Entities may immediately begin utilizing 340B drugs as early as the date when the first eligible patient is seen at the new location. Covered Entities are no longer required to wait until the Quarterly Enrollment Period and subsequent Effective Date to utilize 340B drugs at eligible locations. Potentially, the change generates up to 18+ months of additional savings. Historically, Covered Entities have received findings of diversion during HRSA audits for utilizing 340B drugs at unregistered, but otherwise eligible, sites. Not anymore.

The new guidance is applicable to new locations within the four walls of an existing hospital, off-site HOPDs, and temporary HOPDs, although currently the new guidance does not apply to newly eligible Covered Entity parent sites. HRSA has indicated that 340B eligibility will hinge upon the federal 340B patient definition and the Covered Entity’s 340B Policies & Procedures. As such, it is imperative for Covered Entities to clearly state policy as to how they define and track eligibility for unregistered Child Sites. Fortunately, HRSA has provided wide latitude for how CEs may revise their policies to address this issue.

Nevertheless, Covered Entities may encounter some obstacles when operationalizing immediate 340B eligibility for unregistered HOPDs. For example, although prescriptions generated out of new HOPDs will immediately be 340B-eligible, contract pharmacies may struggle to recognize 340B eligibility for those prescriptions until the HOPD is registered on OPAIS. Additionally, drug wholesalers may be hesitant to set up new accounts and ship 340B drugs to unregistered HOPDs.

Advis recommends the following steps and deliberations when considering new, unregistered HOPDs as 340B-eligible:

  1. Revise 340B Policies & Procedures to clearly define and address the eligibility of a newly established HOPD that has not yet been registered on OPAIS, including language stating that patients must continue to meet the 340B patient definition to be considered eligible.
  2. Work with wholesalers and contract pharmacies to establish and operationalize 340B drug purchasing and shipping arrangements for the unregistered eligible HOPD. For instance, if wholesalers are unwilling to ship to an unregistered location, 340B drugs may be sent to an existing Covered Entity registered location or Child Site and then couriered to the new HOPD site.
  3. Once the HOPD appears on the Covered Entity’s Medicare Cost Report and has costs/revenues that appear on the Trial Balance, enroll the HOPD on the OPAIS database during the next available Quarterly Enrollment Period.

Advis will continue to monitor for additional guidance from HRSA and provide additional details as they arise. In the meantime, please refer to Advis’s 340B updates and recommendations. Advis’s 340B experts are also available to answer any questions or requests for assistance:

Dan Avants, J.D.

Amanda Bogle, J.D.

Michael French, J.D.

Published: June 5, 2020