On October 26, 2023, HRSA released a long-awaited notice clarifying the 340B registration notifications for off-site, outpatient facilities. Pursuant to its notice, HRSA has formally confirmed it will revert back to its original regulatory guidelines regarding the registration for off-site, outpatient facilities (also known as child sites), but did allow for some exceptions for child sites eligible but not registered.

However, moving forward from today a location must be listed on OPAIS in order to be eligible. HRSA reiterated:

“…to be considered eligible for the 340B Program, under HRSA’s longstanding guidance (59 FR 47884, Sept. 19, 1994) an off-site, outpatient facility needs to be reimbursable on a hospital’s most recently filed Medicare Cost Report…To meet the statutory requirements at 340B(a)(9) and (d)(2)(B)(iv) of the PHS Act, the off-site, outpatient facility must also be listed in OPAIS.”

During the PHE, HRSA announced the availability of a waiver of the requirement that “…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.”

HRSA has confirmed that this waiver has ended, but offered some exceptions for covered entities to bring their operations into compliance, in keeping with the notice.

Transition Period for Registration of Child Sites

Child sites listed on Medicare Cost Report

HRSA will continue to allow child sites that are currently listed on the hospital’s most recently filed Medicare Cost Report (or will be prior to January 15th) with associated outpatient costs and charges, but that have not yet registered in OPAIS, to continue to use 340B drugs for its patients, pending the registration of those facilities on OPAIS during the next 340B Program quarterly registration period (January 1-16).

Exception for child sites not yet listed on Medicare Cost Report

Additionally, HRSA will continue to allow child sites that are not yet listed as a reimbursable facility on the Hospital’s most recently filed Medicare Cost Report with associated outpatient costs and charges to continue to use 340B drugs for patients of the covered entity if the following conditions are met:

  • Child site was opened and began using 340B drugs before October 26, 2023;
  • The hospital provides notice to HRSA by January 24, 2024 with the following information:
    1. Name of the child site;
    2. The date the specific child site in question will be listed on the hospital’s Medicare Cost Report (the next filed Medicare Cost Report); and
    3. The date the hospital is planning to register the site on OPAIS. The hospital must register the child site on OPAIS at the soonest possible opportunity following notice to HRSA.

Child sites that are not listed on the most recently filed Medicare Cost Report and do not meet the exception requirements stated above must cease dispensing 340B drugs at those child sites no later January 24, 2024.

Rationale for HRSA’s updated guidelines

HRSA noted that program integrity efforts conducted since the start of the COVID-19 PHE “have demonstrated that the waiver has added risk and complexity to HRSA’s ability to effectively oversee ongoing compliance in the 340B Program.” Specifically, HRSA pointed to FY 2023 HRSA audit findings indicating that more than one-third of hospitals were using 340B drugs at unregistered sites, and that as of May 11, 2023, those child sites were not yet registered on OPAIS. HRSA opined that unregistered child sites at one-third of the hospitals audited caused “significant challenges for HRSA to determine compliance for these participating sites, as it was unclear whether the unregistered sites would ever be eligible and an integral part of a 340B hospital.”

HRSA also noted that “circumstances of COVID-19 are no longer rapidly evolving in a manner that requires significant unplanned activities or changes by hospital covered entities to accommodate these exigencies or adjust operations without planning for additional requirements to conduct business.”

To discuss any questions regarding child site registration requirements, please call Advis at (708)-478-7030.

Published: October 26, 2023