In March, a few covered entities were surprised by potential HRSA findings of diversion due to discharge prescriptions for inpatients that did not qualify for 340B. This caused concern that HRSA may be implementing some of the changes found in the proposed 340B Omnibus Guidance released for comments last year. Specifically, the proposed guidance stated that 340B purchased drugs can ONLY be used if the discharge prescription is written for a patient that is billed as an outpatient.
HRSA auditors conveyed to some covered entities that an inpatient location is not a 340B eligible location and written prescriptions for discharge medications for patients from that location are not eligible to be filled with a 340B purchased drug. One covered entity that received a finding had a unique situation where one of their inpatient locations was in an adjacent building that had a separate physical address. The auditor said discharge prescriptions written for patients discharged from that area would not qualify for 340B purchased drugs since it has a separate physical address and was considered an inpatient location. HRSA auditors at other covered entities questioned if discharge prescriptions written for patients discharged from inpatient locations within the four walls of the entity were eligible for 340B purchased drugs. Another facility received a finding but it was overturned when the facility demonstrated that the area the auditor deemed as an inpatient location had reimbursable outpatient observation cost and charges on the Medicare cost report.
It was not known if the change in HRSA’s audit stance may have been triggered by misinformation between the auditors stemming from the one entity with a unique situation or if HRSA may be changing their policy and adding questions in anticipation of the release of the Final 340B Omnibus Guidance. 340B Health sent a letter to OPA on behalf of their member hospitals sharing concerns with this change and outlining how such a significant policy change would be harmful to covered entities and the vulnerable patients that they serve. HRSA responded to 340B Health clarifying that they HAVE NOT changed their policy and 340B purchased drugs may continue to be used for discharge prescriptions written from an inpatient location of the eligible covered entity.
Only time will tell what HRSA’s ultimate stance will be on this issue as we await the Final 340B Omnibus Guidance. Regardless, covered entities must always be prepared to explain how eligibility is determined for each 340B drug, how the covered entity is responsible for the care and use of the 340B drug and have auditable records validating compliance.
