President Biden signing legislation in the Oval Office
President Biden is due to sign legislation this afternoon that will help some hospitals forced out of the 340B program during the COVID-19 pandemic.

Biden to Sign Bill Today Giving Some Relief to Hospitals Forced Out of 340B Due to COVID-19

President Biden is scheduled this afternoon to sign a $1.5 trillion federal appropriations bill with language to help some hospitals forced out of the 340B program during the COVID-19 pandemic.

The bill also gives the U.S. Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (APA), the agency that runs 340B, $11.2 million for fiscal year 2022. That’s $1 million more than the last year, according to budget tables, but $6 million less than the Biden administration requested.

The OPA line item in the bill is under HRSA’s Health Care System Bureau. OPA, however, has been moved into a new Office of Special Health Initiatives (OSHI) within the HRSA administrator’s office. It is not clear if OPA can access more funding beyond its $11.2 million appropriation from the administrator’s office. Years ago before OPA got its own line in the budget, all its funding came through the administrator’s office.

The special 340B hospital language in the spending bill will help hospitals whose admission patterns have been disrupted by COVID-19 to the point that their Medicare disproportionate share (DSH) adjustment percentages have fallen below the levels needed to remain in 340B.

Hospitals forced to withdraw from 340B for this reason during cost reporting periods starting in 2020 can regain access to 340B drug discounts starting today, the date the bill becomes law, through the end of this year. They cannot recover 340B discounts that they were unable to access during their ineligibility, however. Some hospitals say they spent millions of dollars more on covered outpatient drugs than they otherwise would have while ineligible.

To have their eligibility restored, hospitals will have to attest to HRSA that they were forced out of 340B due to the pandemic affecting their ability to meet their applicable DSH adjustment percentage requirement.

HRSA will have to set up a system quickly to process hospitals’ applications for readmission.

“Once the bill has been signed into law, we will work to provide additional information to stakeholders as soon as possible,” a HRSA spokesperson said late last week.

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