The next 340B quarterly registration period is once again upon us. The registration window will begin on October 1st and conclude on October 17th. The traditional 340B enrollment period is usually the 1st through the 15th, however, during this particular window, both the beginning and ending dates fall on a Saturday. Therefore, the window has been extended to include Monday, October 17th according to the Office of Pharmacy Affairs (OPA).
If approved for participation in the 340B Program, covered entities that register during this window will have a start date of January 1, 2017. Here is a link to the HRSA website where you can find their Hospital Registration Instructions.
Only certain non-profit healthcare entities that have federal designations or receive funding from specific federal programs are eligible for the 340B Drug Pricing Program. Entities must meet and maintain certain criteria in order to register and be approved to purchase discounted drugs through the 340B Program. For-profit hospitals are not eligible to participate in the 340B program. Healthcare entities that may be eligible are:
- Hospitals
Disproportionate Share Hospitals
Children’s Hospitals
Free Standing Cancer Hospitals
Sole Community Hospitals
Rural Referral Centers
Critical Access Hospitals
- Health Centers
Federally Qualified Health Center
Federally Qualified Health Center Look-Alikes
Native Hawaiian Health Centers
Tribal / Urban Indian Health Centers
- Specialized Clinics
Ryan White HIV/AIDS Program Grantees
Black Lung Clinics
Comprehensive Hemophilia Diagnostic Treatment Centers
Title X Family Planning Clinics
Sexually Transmitted Disease Clinics
Tuberculosis Clinics
Hospitals classified as Disproportionate Share Hospitals (DSH) serve a significantly disproportionate number of low-income patients and receive payments from the Centers for Medicaid and Medicare Services to help cover their costs of providing care to this underserved population. Disproportionate Share Hospitals, Children’s Hospitals and Freestanding Cancer Hospitals must have a disproportionate share (DSH) adjustment percentage greater than 11.75% on their most-recently filed cost report to be eligible to participate in the 340B Drug Pricing Program.
Sole Community Hospitals and Rural Referral Centers must have a DSH percentage equal to or greater than 8% on their most-recently filed Medicare cost report in order to participate in the 340B Program. Critical Access Hospitals receive cost based reimbursement from Medicare and do not receive a DSH adjustment.
Hospitals that are eligible in more than one type of healthcare organization category may only select one type and must abide by the 340B eligibility and compliance requirements for that type of organization (i.e., a hospital that meets eligibility for both a DSH and a Sole Community Hospital may choose either type of eligibility. A Sole Community Hospital will need to comply with the Orphan Drug rule and DSH will need to comply with the GPO prohibition).
A hospital must also fall into one of the classifications below and have a certification or contract with a State or government official reflecting the hospital’s status to gain 340B eligibility.
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A private, non-profit hospital under contract with State or local government to provide health care services to low income individuals who are not eligible for Medicare or Medicaid. The hospital must have a signed certification or contract with an appropriate government official (such as the governor, county executive, mayor or an individual authorized to represent and bind the governmental entity).
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A hospital that is owned or operated by a unit of State or local government. This classification is typically shown as the type of control on worksheet S-2 of the Medicare Cost Report as controlled by the government and a government official must certify to the government ownership or operation status.
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A public or private non-profit hospital that is formally granted governmental powers by a unit of State or local government. Hospitals qualifying under this provision must submit the name of the government entity granting the governmental power to the hospital, provide a description of the governmental power that has been granted with a brief explanation as to why the power is considered to be governmental and a copy of the official document issued by the State or local government to the hospital that reflects the formal grant of government power.
Health centers and specialized clinics receive Federal grants, Federal contracts, Federal designations or establish Federal projects to treat specific conditions or patient populations making them eligible for the 340B Program. Drugs dispensed through the 340B Program may only be given to patients receiving healthcare services within the scope of the qualifying Federal grant, contract, designation or project.
When a healthcare organization is approved and becomes a 340B Covered Entity, they must notify the Office of Pharmacy Affairs (OPA) if there is a change in their eligibility. If there is a change in a covered entity's eligibility status where they are no longer eligible for the 340B program, the covered entity has a responsibility to immediately notify the OPA and should stop purchasing drugs through the 340B Program.
While gaining 340B eligibility is the first step to participation in the 340B program, your efforts cannot stop there. There are numerous 340B compliance review measures that must be maintained as 340B covered entities must attest annually during 340B recertification that they are complying with all 340B program requirements. Failure to stay in 340B compliance, could result in termination from the program. SCA’s expertise in the DSH space as well as the 340B compliance space is a differentiator and allows us to provide an overall comprehensive service to our clients. In addition to assisting healthcare organizations qualify for 340B program participation, we have developed a comprehensive 340B compliance program including quarterly and annual independent audits to ensure that covered entities achieve full 340B compliance. Read more about our 340B audit & compliance program services HERE.
