Help make 340B work for rural

The Health Resources and Services Administration (HRSA) recently released a proposed guidance about the 340B program, the long-anticipated so-called “mega guidance.” It’s comprehensive and discusses virtually all aspects of the 340B program. It includes restatements, clarifications, and proposed changes to current 340B policy. The “mega guidance” is only a proposal at this point, meaning HRSA is asking for your input about its enforcement policy. This is your opportunity to make your voice heard about what is and is not working in the current system and on your perception of the proposed changes. While not every change impacts rural, it’s important that there are many voices from rural America commenting to HRSA about the importance of 340B in rural America and the barriers and burdens to rural covered entities participating and receiving the greatest benefit. The guidance covers eight broad areas: covered entity eligibility, covered outpatient drug definition/eligibility, patient definition/eligibility, covered entity responsibility, contract pharmacy, manufacturer responsibility, rebate option for AIDS Drug Assistance Program, and program integrity. A brief overview of some changes and areas of concerns are outlined below. For patient definition/eligibility, HRSA is proposing a change from a three-prong, to a six-prong test.
  1. Individual receives service at covered entity site
  1. from a provider employed  or contractor (such that  the covered entity may bill for services on behalf of the provider). This is particularly concerning to the many provides that have a contracted physician that the hospital does not bill.
  2. individual receives a drug ordered by the covered entity provider as a result of the service described in the second prong. This would exclude patients who are only receiving drugs or infusions from the covered entity, a major concern for rural providers that provide infusion services for patients that see a specialist that prescribed the infusions.
  3. health care service consistent with scope of grant, project, or contract. For covered entities eligible due to a grant this could present some line drawing questions. For example, if a provider under a grant for family planning services prescribes a birth control pill, it’s unclear whether they could also use 340B for the blood pressure medication prescribed since the patient’s high blood pressure is counter-indicated for use of the birth control.
  4. The individual is classified as an outpatient when the drug is ordered. This language seems to disallow the use of 340B for discharge prescriptions, even though they are for use as an outpatient, since the drug was ordered while the patient was an inpatient.
  5. covered entity maintains access to auditable health care records, which demonstrate a provider-to-patient relationship, must be met for each 340B drug.
Covered outpatient drug definition/eligibility is in many ways the same with one main concern: that 340B drugs can not be used for Medicaid-bundled payments. It is unclear what the impacts of this change will be for bundled arrangements outside of Medicaid, a major concern given the move toward bundled arrangement in health care.   Covered entity responsibility places a new responsibility on covered entities to avoid duplication of discounts, especially for Medicaid managed care. Although there was a lot of talk about contract pharmacies prior to the release of the guidance, the proposed guidance leave the use of contract pharmacies largely intact. However, HRSA proposed additional oversight in the form of a quarterly review with disclosure of all non-compliance (not just material breaches). For covered entity eligibility the proposed guidance largely restates current policy. However, the self disclosure of any 340B violations is now required for all violations and not just “material breaches.”  It’s unclear why HRSA has made this change, but it seems that it will create a great deal of paperwork without a clear benefit. HRSA is seeking an alternative to requiring a child site be listed on the Medicare cost report before being 340B eligible (the current policy). This is important for covered entities opening new child sites and could potentially allow them to begin using 340B drugs at new locations much faster. If you have questions or would like help preparing comments, please email Diane Calmus. NRHA is happy to help you draft comments and would like to include your information in our letter as well. Comments are due Oct. 27 and can be submitted online at

This website uses cookies. By accepting the use of cookies, this message will close and you will receive the optimal website experience. For more information on our cookie policy, please visit our Privacy Policy