COVID-19 PHE sign with beach in background
The Biden administration plans to end the nationwide COVID-19 public health emergency on May 11.

Upcoming End of COVID-19 Emergency Could Prompt HRSA to End or Scale Back 340B Flexibilities

The Biden administration said on Monday that it plans to end the nationwide COVID-19 public health emergency on May 11. When the PHE ends, COVID-related 340B program flexibilities announced in March 2020 could end too.

The U.S. Health Resources and Services Administration has not responded to a request for clarification about which flexibilities may cease and which ones, if any, will persist. HRSA told 340B Report in June 2020 that two of its policy clarifications prompted by the pandemic “are in place regardless of the COVID-19 pandemic.”

The first clarification came in March 2020. HRSA on the Office of Pharmacy Affairs’ then-new COVID-19 resources webpage recognized telehealth as just another a mode of delivering health care services. It recommended that covered entities outline the use of telehealth and other new technologies for delivering health care in their 340B policies and procedures and continue to ensure auditable records are maintained for each eligible patient dispensed a 340B drug.

The second clarification came in June 2020. HRSA said on the COVID-19 resources webpage patients of a new hospital child site that is not yet listed on the hospital’s cost report “may still be 340B eligible to the extent that they are patients of the covered entity.”  Hospital groups had been urging HRSA for over a decade to implement this change.

“These situations should be clearly documented in the covered entity’s policies and procedures,” HRSA said. “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 fate of other flexibilities that HRSA has allowed during the pandemic is not known. They include:

  • Exempting 340B site registration requirements on a case-by-case basis.
  • Allowing remote audits of covered entities, and in some cases, granting extra time to respond to audit deadlines.
  • Allowing some hospitals not usually qualified to buy drugs though a group purchasing organization to purchase through a GPO if they cannot get the 340B price or wholesale acquisition cost price due to shortages and not requiring reporting of this information to HRSA.  This is another policy that hospital groups have been advocating for several years.

A law enacted in March 2022 let hospitals terminated from 340B during the pandemic because their Medicare disproportionate share (DSH) adjustment percentage fell below 340B statutory requirements as a consequence of the pandemic apply for readmission. The hospital must have been terminated from 340B during Medicare cost reporting periods ending no later than December 31, 2022.

House Energy & Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) and Richard Burr (N.C.), the now-retired Republican leader of the Senate Health, Education, Labor, and Pensions Committee, asked the Government Accountability Office to study and issue a report on that law.

Hospitals picked for the study received a questionnaire that asked about any lapse in their 340B eligibility and, if so, how it affected what they had to pay for covered outpatient drugs. The questionnaire however also asked:

  • if the hospital provides “low-income, uninsured patients with discounts on the drug price of some or all 340B drugs dispensed” at its contract pharmacies. It asked if hospitals for example gave patients drug discount cards or annotated electronic prescriptions showing that the patient is eligible for a discount.
  • “What is the drug price that low-income, uninsured patients are responsible for paying on 340B drugs dispensed at your hospital’s contract pharmacy(ies)?”
  • if the hospitals give such patients discounts at their in-house pharmacies and the price these patients are charged for 340B drugs.
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