We are certain that there will be clarification of the patient definition in the upcoming 340B Mega-Guidance but it is still not known exactly what will be proposed. It’s important for hospital staff to review how they currently apply patient definition in their covered entity now so they will have a good understanding how the proposed guidance will affect their 340B program and be able to comment on the proposed Mega-Guidance accordingly.
As It 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.
DSH hospitals are exempt from the third criteria that an 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.”
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.”
Rumor Has It:
In the anticipated release of the Mega-Guidance, there may be changes or limits on the types of patients that can use 340B drugs, locations outside the hospital where 340B drugs can be used and the types of drugs for which 340B pricing may be used. The following are four examples of areas that may see a change or limit proposed:
Currently, 340B drugs may be used for eligible patients with an outpatient status up to the point they are admitted and become inpatient status (e.g., observation, ED and outpatient surgery patients that are admitted). Hospitals may want to consider what impact their 340B program will have if 340B drugs may only be used when the service is billed as an outpatient service.
Presently, 340B pricing is available for discharge prescriptions that are written in connection with an inpatient stay. Hospitals may want to explore the impact on their covered entity if 340B pricing was only available for prescriptions written in connection with outpatient services.
There have been many questions surrounding 340B prescriptions connected with a patient’s follow-up care and at what point the responsibility for the care and associated prescriptions is no longer with the covered entity. In 2001, a letter written by Thomas Morford, Deputy Administrator of HRSA, known as the “Morford Letter”, stated that 340B drugs can be used for follow-up care that “bears a proximate relationship to the initial covered entity hospital care with respect to both type and time of care”. This has been interpreted in different ways and it is expected that HRSA will give clarification in the guidance. HRSA may limit the number of refills that are allowed 340B pricing or could only allow 340B pricing for the initial prescription.
Another grey area where clarification is expected is with physician-administered drugs. There has been uncertainty when an order is written by a physician that has no relationship with the covered entity for drug administration, such as chemotherapy. The uncertainty is with who is providing the healthcare services and where the responsibility of care lies.
In conclusion, we can be certain that the Mega-Guidance will contain language regarding patient definition and only time will tell exactly what changes will be imposed and if greater clarity is attained. Until then, hospitals should be reviewing their current processes in the areas mentioned above so they will understand how changes in the 340B program may affect their covered entity and be prepared to comment on the proposed guidelines accordingly.
