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HRSA began contacting hospitals today about possible reinstatement in 340B if their termination was due to their DSH adjustment percentage falling as a result of the hospital's COVID-19 response.

News Alert

HRSA Starts Contacting Hospitals Forced Out of 340B During Pandemic About Possible Reinstatement

UPDATE Friday, March 18, 2022, 1:30 p.m. EDT—The U.S. Health Resources and Services Administration (HRSA) told 340B Report shortly after this story was published, “To be eligible, [a] hospital’s termination must have been as a result of actions taken by or other impact on the hospital in response to, or as a result of, the COVID-19 Public Health Emergency. HRSA contacted 94 hospitals that were terminated from the Program for any reason during the Medicare cost reporting periods beginning October 1, 2019 and ending no later than December 31, 2022.  Before any hospital would be reinstated, they must submit an attestation detailing how their termination was a result of the COVID-19 Public Health Emergency.”


The U.S. Health Resources and Services Administration (HRSA) this morning began contacting hospitals forced to leave the 340B program during the COVID-19 pandemic about possible reinstatement to 340B under a new federal law.

Health systems with hospitals forced out of 340B during the pandemic because their Medicare disproportionate share (DSH) adjustment percentage fell below 340B statutory requirements say the hospitals’ 340B authorizing officials and primary contacts began getting email messages from HRSA early today. The email says the hospitals “may be impacted” by language in a federal spending bill that President Joe Biden signed on Tuesday “which creates an eligibility exception that permits certain hospitals’ reinstatement into” 340B.

The email continues:

The hospitals eligible for reinstatement are disproportionate share hospitals (DSH), sole community hospitals (SCH), rural referral centers (RRC), children’s hospitals (PEDS), and free-standing cancer hospital (CAN). Eligible hospitals must? meet the following conditions:

  1. The hospital must have been terminated from the 340B Program due to an inability to meet the statutorily-required disproportionate share adjustment (DSH percentage) during Medicare cost reporting periods beginning October 1, 2019 and ending no later than December 31, 2022.
  2. The hospital’s termination must have been as a result of actions taken by or other impact on the hospital in response to, or as a result of, the COVID-19 Public Health Emergency (PHE).
  3. The hospital must have been a covered entity on January 26, 2020 (i.e., the day before the first day of the COVID-19 PHE).

If your hospital believes it is eligible for reinstatement into the 340B Program based on this provision, please contact the 340B Prime Vendor at 1-888-340-2787 (Monday – Friday, 9 a.m. – 6 p.m. ET) or apexusanswers@340bpvp.com to receive the “Hospital Attestation for Reinstatement into the 340B Drug Pricing Program.” Requests will be evaluated on a case-by-case basis.

The three-page attestation form that the email refers to must be signed by the hospital’s authorizing official. (HRSA has said before that the authorizing official must be a CEO or other individual who can bind the entity to a contract.) The form includes a text box to “provide information on any actions taken by or other impact on the hospital in response to or as a result of the COVID-19 PHE that may have impacted the hospital’s ability to meet the applicable required DSH percentage for participation in the 340B Program.”

The form includes an email address for submissions. “HRSA will review the attestation and notify the hospital of the reinstatement decision as soon as possible,” the form says.

“A hospital that has been reinstated will be considered active in the 340B Program based on the ‘participation start date’ reflected in the hospital’s parent OPAIS record.” The form says. “The hospital must comply with all 340B Program requirements as of the ‘participation start date’ and should ensure that all policies and procedures are up to date and auditable records are maintained.”

HRSA this morning also posted a notice on its Office of Pharmacy Affairs website homepage about the new 340B hospital DSH eligibility requirement exception. “If you believe that your hospital may be eligible for this exception and have not yet been contacted by HRSA, please contact the 340B Prime Vendor,” the notice says. “Requests will be evaluated on a case-by-case basis.”

Under the new law, hospitals forced to withdraw from 340B because their DSH percentage fell due to COVID-19 can regain access to 340B discounts only from their reinstatement through the end of this year. They cannot recover 340B discounts that they did not access during their ineligibility. Some hospitals say they spent millions of dollars more on covered outpatient drugs than they otherwise would have while ineligible.

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