HRSA Releases 340B ‘Omnibus Guidance’


HRSA has released the long-awaited proposed 340B program "omnibus guidance" intended "to provide increased clarity…for all 340B Program stakeholders and strengthen HHS's ability to administer the 340B Program effectively," per HHS.

At a hefty 90 pages, the proposed guidance contains many of the topics HRSA was planning to issue in a proposed rule it withdrew last year (covered in the November 21 issue of Health Policy Weekly) in response to a court challenge brought against HRSA by the Pharmaceutical Research and Manufacturers of America (PhRMA) (see May 30 issue of Health Policy Weekly). While rules are legally binding, guidance is not.

Our preliminary review outlines major topics HRSA has addressed; while many of these areas have been covered in previous guidance and/or regulation, HRSA is looking to clarify details open for interpretation in the program.

Covered Entities

The Public Health Service Act (PHSA) specifies 3 categories of hospitals eligible for the 340B program ("covered entities"): 1) hospital ownership or operation by a state or local government; 2) a hospital that is a public or private non-profit corporation formally granted governmental powers by a unit of state or local government; and 3) a private non-profit hospital which has a contract with a state or local government to provide healthcare services to low-income individuals not eligible for Medicare or Medicaid.

Non-hospital covered entities include those receiving certain federal grants, federal contracts, federal designations, or establishing federal projects. A non-hospital covered entity also may include associated healthcare delivery sites located at a different address, designated by HHS as "child sites." HHS is seeking comments on alternatives to demonstrating the eligibility of an offsite outpatient facility or clinic.

The Affordable Care Act (ACA) extended the 340B program to children's hospitals, freestanding cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals.

Clarified Definition of "Patient"

The law creating the 340B program offers no specific definition of the term "patient." HRSA has attempted to define the term "patient" in guidance, but the definition has been criticized for lacking clarity and for allowing entities to use the 340B program in ways not contemplated by Congress. One of the most eagerly anticipated provisions of this proposed guidance, therefore, is the HHS proposed definition of "patient."

HHS will consider an individual to be a patient of a covered entity, on a prescription-by-prescription or order-by-order basis, if all of the following 6 conditions are met:

HPW_August 28 Chart

One clarification in the patient definition potentially reducing the quantity of drugs paid under the 340B program is that the dispensing or infusion of a drug, without a covered entity provider-to-patient encounter, does not qualify an individual as a patient for the 340B program.

This definition appears to force a closer connection between the 340B entity and the prescription / patient than might be currently in place. In addition, HHS reiterates that employees of covered entities do not become eligible to receive 340B drugs solely by being employees but, rather, by being a patient as defined in this guidance. Covered entities solely financially responsible for employees' healthcare would not meet the level of responsibility for healthcare services as outlined in the guidance.

Additionally, HHS proposes to "reaffirm" its long-standing position that an individual enrolled in a Ryan White AIDS Drug Assistance Program will be considered a patient of the covered entity.

Proposed Standard for Records Retention

HHS acknowledged that 340B program stakeholders have been requesting a standard for records retention and proposes a retention standard for all 340B program records for a period of not less than 5 years. The department believes this duration balances the need for a covered entity to document compliance with the effort and expense required to maintain those records. A covered entity's failure to provide required records is grounds for termination from the 340B program.

Although this guidance provides more clarity in some areas, the non-profit organization 340B Health, like others, indicated room for interpretation still exists:

"It has been a long time coming. There are gray areas in the program and we look forward to having more clarity. This is an important process and it is our hope that safety-net healthcare providers will not find themselves limited in their ability to meet their mission to treat the underserved."

The proposed guidance's 60-day comment period ends October 27.

HPW Logo The above excerpt was featured in the 8/28/2015 issue of Health Policy Weekly. Health Policy Weekly, a weekly e-newsletter delivered every Friday, recaps legislative and regulatory developments and healthcare reform news that impacts the healthcare industry.Health Policy Weekly is developed by Xcenda as a complimentary service for clients of AmerisourceBergen Corporation as well as industry decision makers within the manufacturer, managed care, healthcare provider and pharmacy community. Click here for more information or to subscribe to Health Policy Weekly.


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