The 340B Drug Pricing Program Omnibus Guidance (Mega-Guidance) was published for public comment August 28, 2015. You can find it HERE. Please note, comments should be submitted on or before TUESDAY, OCTOBER 27, 2015. The Mega-Guidance is extremely comprehensive as it addresses numerous aspects of the 340B program but the most significant proposed changes were in the areas of:
patient definition
physician administered drugs (stricter guidance)
record retention standards
duplicate discounts including Medicaid Managed Care
contract pharmacy
In this article, we are going to focus on patient definition as it is today and what it would look like if the 340B Mega-Guidance is finalized as proposed.
As Patient Definition Stands Now:
The current patient definition was published in the October 24, 1996 Federal Register and resulted in more questions than answers. Proposed clarification was published by HRSA in 2007 but was never finalized. The Federal Register states, “An individual is a patient of a covered entity (with the exception of State-operated or funded AIDS drug purchasing assistance programs) only if:
The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual’s health care;
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.
The individual receives a health care service or range of services from a 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.”
It also states, “An individual will not be considered a patient of the entity for purposes of 340B if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting.”
Patient Definition Under the Mega-Guidance:
The Mega-Guidance expands on patient definition by proposing a “clarified definition of patient”. This clarification is a 6-part test (new language is bolded) to determine if a patient is eligible to receive 340B drugs. In order for a patient to be eligible to receive 340B drugs, ALL of the following conditions must be met on a prescription-by-prescription or order-by-order basis:
The individual receives a health care service at a facility or clinic site which is registered for the 340B Program and listed on the public 340B database;
The individual receives a health care services provided by a covered entity provider who is either employed by the covered entity or who is an independent contractor for the covered entity, such that the covered entity may bill for services on behalf of the provider;
An individual receives a drug that is ordered or prescribed by the covered entity provider as a result of the service described in (2);
The individual’s health care is consistent with the scope of the Federal grant, project, designation, or contract;
The individual’s drug is ordered or prescribed pursuant to a health care service that is classified as outpatient;
The individual’s patient records are accessible to the covered entity and demonstrate that the covered entity is responsible for care.
Examples of 340B Situations the Proposed MG would eliminate:
One could say that the proposed clarification to patient definition alone would squash a significant amount of 340B savings that a 340B covered entity is receiving today. Let’s take a look at situations in which patient definition would not be met and subsequently the patient not eligible to receive 340B drugs.
Let’s say a patient receives follow up care at a private practice resulting in a prescription. This example only meets the patient definition IF the private practice is a child site of the covered entity and is listed in the 340B database. Otherwise, any prescription written by the practitioner would not be eligible for 340B.
Patients of providers having privileges or credentials at a covered entity is not sufficient to demonstrate that an individual treated by that privileged provider is a patient of the covered entity for 340B program purposes. It is unclear what is meant by this provision. Most facilities consider their providers with privileges or credentials as “independent contractors”, however they do not bill for for services on behalf of the provider.
340B prescriptions resulting from a referral. If a patient (who is eligible to receive 340B drugs) is referred to a non-covered entity from a covered entity, any resulting prescriptions would not be eligible for 340B.
Infusion drug savings when a patient is referred from an outside physician. The infusion of a drug alone, without a covered entity provider-to-patient encounter does not qualify an individual as a patient for purposes of the 340B program.
Any discharge prescription drugs that are written for inpatients will no longer qualify for 340B pricing. HRSA is limiting 340B use to where a prescription or order results from a service designated as outpatient. Per the Mega-Guidance, services are considered outpatient if they are billed as outpatient.
Medications administered to an outpatient who is ultimately admitted as an inpatient. Again, 340B drugs can only be used where the patient is billed as an outpatient. Specific examples where 340B drugs cannot be used would be an observation patient that is admitted as an inpatient, ED patient that is admitted as an inpatient, Outpatient surgery patients that are admitted as an inpatient, and also patient charges that are rolled into an inpatient stay due to Medicare’s 72 hour rule.
Exceptions to the proposed patient definition test:
There were two exceptions provided in the Mega-Guidance for where the proposed 6-part patient definition test would not apply:
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If a patient is enrolled in a Ryan White HIV/AIDS Program Drug Assistance Program (ADAP)
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If the Secretary declares a public health emergency. HHS will allow flexibility in determining if a patient meets the patient definition in the instance that there is limited medical documentation or a perhaps a site is not listed in the 340B database. The hospital is still required to maintain records on alternative methods used during this time period.
The changes that HRSA is proposing to patient definition could greatly reduce your hospital’s 340B savings especially in the specific instances mentioned above. As a reminder, comments should be submitted on or before TUESDAY, OCTOBER 27, 2015. Covered entities should consider how the proposed changes to patient definition will affect their current operation/practices and 340B savings as a part of their comments.
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