COVID-19 flexibility
HRSA has reversed course and will end a 340B COVID-19 flexibility that it previously said was permanent that lets hospitals under certain conditions start using 340B drugs at offsite outpatient locations sooner than HRSA would normally allow.


HRSA Says COVID Flexibility About Dispensing 340B Drugs in Unregistered Hospital Offsite Locations Will End Thursday

The U.S. Health Resources and Services Administration said late Friday that when the COVID-19 public health emergency ends on Thursday, so too will a nearly three-year-old policy clarification that lets hospitals under certain conditions dispense 340B drugs at offsite outpatient clinics not yet registered in the 340B program because they are not yet listed on the hospital’s most recently filed Medicare cost report.

HRSA told 340B Report in early June 2020 two days after it announced that policy clarification that it was “in place regardless of the COVID-19 pandemic.” 340B hospital representatives said at the time the decision was significant and long overdue. HRSA’s about-face probably will shock many of them.

HRSA has long said that before a hospital offsite outpatient facility may be registered for 340B it must be listed as reimbursable on the hospital’s most recently filed Medicare cost report and have associated outpatient costs and charges, as outlined in 1994 340B program guidance. Hospitals have long complained that under this policy it can take up to 22 months for an open and fully functioning offsite location to become 340B-qualified.

During the COVID-19 pandemic’s first wave, HRSA noted in an FAQ on its then-new COVID-19 340B Resources webpage that “for hospitals who are unable to register their outpatient facilities because they are not yet on the most recently filed Medicare cost report, the patients of the new site may still be 340B eligible to the extent that they are patients of the covered entity…. These situations should be clearly documented in the covered entity’s policies and procedures. In addition, a covered entity is responsible for demonstrating compliance with all 340B program requirements and ensure that auditable records are maintained for each patient dispensed a 340B drug.”

The 340B Prime Vendor Program subsequently published an almost identical 340B program FAQ. Both the HRSA and prime vendor FAQs were still publicly available this morning.

HRSA on May 1 said in a notice on its Office of Pharmacy Affairs homepage that “the specific COVID-19 PHE flexibilities allowed under the 340B program will expire beginning May 11, 2023.”

340B Report published a story about the notice on May 2. For that story, we asked HRSA if the COVID-19 flexibility regarding using 340B drugs at hospital offsite outpatient locations would remain permanent as HRSA had said it would in June 2020. We also asked about the permanence of another 340B flexibility, also issued in June 2020, clarifying that “telemedicine is merely a mode by which the health care service is delivered” and recommending that “covered entities outline the use of these modalities in their policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug.”

When HRSA told us on June 8, 2020, that the hospital offsite outpatient location flexibility would stay in place regardless of the pandemic, it simultaneously told us the telehealth flexibility likewise would stay in place.

HRSA responded to our questions for our May 2 article on Friday, May 5 at about 5:30 p.m. Eastern.

HRSA observed that we reported on May 2 that HRSA told us in June 2020 that both the telehealth flexibility and the hospital offsite outpatient location flexibility would continue on a permanent basis.

In its email to us on Friday, HRSA said: “HRSA would like to clarify that the flexibility that allowed hospitals to use 340B in offsite outpatient facilities not yet listed as reimbursable on a hospital’s Medicare cost report will no longer be available when the public health emergency expires.”

HRSA in the email to us on Friday did not address our question about the future status of the telehealth flexibility.

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