HRSA Answers More Questions About 340B Compliance During Pandemic

HRSA Answers More Questions About 340B Compliance During Pandemic

The Health Resources and Services Administration (HRSA) explained on its website yesterday how it will deal with 340B program requirements regarding telehealth, site registration, patient definition, the hospital group purchasing exclusion, and covered entity audits during the COVID-19 epidemic.

HRSA indicated that during the COVID-19 public health emergency it will not change its policy of accepting new 340B parent site, child site, and contract pharmacy registrations only during four two-week periods per year. The next is April 1-15 and the one following is June 1-15. HRSA previously has lifted the time limit on 340B registration in states and territories affected by natural disasters.

HRSA also said on the new webpage while it is unable to relax the 340B patient definition “at this time” providers should check back for recordkeeping-related flexibilities. HRSA said it could not give disproportionate share, children’s, and free-standing cancer hospitals a waiver during the epidemic from complying with the statutory prohibition against buying covered outpatient drugs from a group purchasing organization. It said providers using telemedicine to serve patients during the outbreak should update their 340B policies and procedures accordingly and keep auditable records. Finally, it declined to suspend or cancel covered entity audits and said it would conduct the audits remotely instead.

In a scoop earlier this week, HRSA told 340B Report that providers concerned about whether they were responding to the COVID-19 epidemic in compliance with 340B drug discount program requirements should contact HRSA directly for an evaluation. On the new webpage, it now says stakeholders with such questions should instead contact the 340B Prime Vendor Program (PVP), which “will coordinate with HRSA technical assistance and evaluate each issue on a case-by-case basis.”

The new HRSA webpage features five new epidemic-specific 340B FAQs on these topics:

Telehealth and other modes of delivering health care

In what could be a first with implications lasting long after COVID-19 fizzles out, HRSA recommends to providers how they can incorporate new technologies and other “modes” of delivering health care in compliance with 340B program requirements. “HRSA understands that the use of technology in health care delivery during this time is critical, and that telemedicine is merely a mode by which the health care service is delivered,” HRSA says. “For the 340B Program, HRSA recommends 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.”


There will be no blanket relaxation of 340B site registration policies during the epidemic, HRSA indicated. It said PVP will evaluate providers’ concerns on a case-by-case basis. “In addition, please review the content on this webpage for certain flexibilities during this time,” HRSA said.

Patient Definition

HRSA said “at this time [it] is unable to waive” the 340B patient definition to let providers dispense or administer 340B-purchased drugs to all who need them. “However, please review the content on this webpage for certain flexibilities during this time related to record-keeping.”

GPO Exclusion

HRSA said it “is unable to waive” language in the 340B statute barring disproportionate share (DSH), children’s, and free-standing cancer hospitals from obtaining covered drugs through a group purchasing organization or other arrangement. It said if a hospital subject to the exclusion can’t obtain a covered drug at the 340B ceiling price or at wholesale acquisition cost due to shortages, it can use GPO or GPO private label products “only if it immediately notifies OPA detailing the covered outpatient drug(s) involved, the manufacturer, and the communication between the parties as to why the product was not available at 340B or WAC.” HRSA said during the epidemic providers “should continue” to follow policies and procedures on buying and dispensing 340B drugs and “must continue” to keep auditable records.

Covered entity audits

In response to the question “Does HRSA plan to suspend or cancel audits based on COVID-19?” the agency said it “is moving towards conducting 340B Program covered entity audits remotely (virtually) for the next several months while we monitor and assess the impact on the covered entities.” It asked providers that have been engaged about an audit and that have questions to contact HRSA’s audit contractor Bizzell Group. “HRSA will continue to monitor the COVID-19 response and provide updates accordingly,” it said. The FAQ does not address HRSA’s plans for drug manufacturer audits. HRSA has finalized 21 such audits and said it planned to conduct five more this fiscal year.

Hospital Group’s Letter

While HRSA was posting the new COVID-19 resources webpage yesterday, hospital group 340B Health sent it a letter asking it to:

  • minimize 340B paperwork for covered entities’ use of private label drugs or drugs purchased through group purchasing arrangements
  • open 340B registration immediately and keep it open for the duration of the pandemic
  • postpone 340B covered entities audits
  • describe the minimum 340B patient eligibility documentation HRSA will accept during the pandemic.

The group sent a separate letter to Health and Human Services Secretary Alex Azar asking him to:

  • delay implementation of the Centers for Medicare & Medicaid Services survey of 340B hospitals’ drug acquisition costs
  • suspend the nearly 30 percent Medicare Part B payment reduction to 340B hospitals for outpatient drugs
  • Waive the Medicare DSH adjustment percentage requirements for 340B hospitals to prevent hospitals currently participating in 340B from losing program eligibility due to treatment of COVID-19 patients.

The letter also asked Azar to relax the 340B group purchasing exclusion and to open 340B registration for the duration of the epidemic.

As of this afternoon, the White House Office of Management and Budget had not yet authorized CMS to begin surveying 340B hospitals about their Medicare Part B drug acquisition costs. CMS scheduled the survey to run from March 23 through April 10, but it cannot move forward without OMB’s permission. There are no clear legal answers about CMS’s options if it does not get OMB’s approval before Monday’s scheduled start date.

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